Many business owners in California ask, “How much will workers’ compensation insurance cost me? Can you give me an estimate so I can have a ballpark range?”
Unfortunately there is no easy way to estimate how much your workers’ compensation insurance will cost you because of all the variables involved:
How Your Workers’ Compensation Premiums are Determined
1. Your industry classification
2. Your history of work related injuries
3. A formula called an “experience modification”
4. Payroll numbers by worker type
5. Underwriting adjustments
6. If you have safety programs, any violations, and several other factors.
7. The carrier’s rates for your type of business
“While the Workers’ Compensation Insurance Rating Bureau issues recommended rates and carriers must file their rates with the California Department of Insurance, rates can vary from carrier to carrier.” –California Department of Industrial Relations.
Because of all the variables involved, it is pretty much impossible to come up with a number without plugging in all the information and submitting it to several carriers. That is where a broker comes in handy, plus they can give you tips how to save money on your insurance and how to lower your ex-mod.
About Experience Modifications
The experience modification (Ex-mod) is a complicated formula that takes into account the history of your claims. Businesses do not receive an experience mod until they have three years of history. Until you receive an ex-mod, your premium is figured with an ex-mod of “1″ (also can be read as 100).
100 is an average ex-mod. When your business has no work comp claims and a great history, your ex-mod will go down and you will receive a credit toward your workers’ compensation premium. For example, a business issued an ex-mod of 70 would receive a 30% credit toward their premium.
Why a Good Insurance Broker is Crucial to Getting the Best Workers’ Compensation Rate
It is important to know that many errors can occur in the Unit Stat Filing process (which determines an ex-mod). Studies have shown that more than half of experience modifications have errors, and only a diligent, highly trained insurance broker can analyze the data to determine if your information is correct.
Invensure Insurance Brokers in Irvine has found that on average, those who have mistakes in their experience modifications can save as much as 30% on their insurance premiums after these mistakes have been fixed.
That being said, if you were looking for a simple explanation or a straight number for Workers’ Compensation insurance for your business in California, the only way to get a good number is to contact a licensed insurance agency.
Invensure excels at finding the best coverage for the best price. We work with all the major Workers’ Comp insurance carriers so we can get you the best policies at the best rates.
We also do a thorough analysis of your Unit Stat filing and the other factors that make up your Ex-mod to make sure your premium is as low as possible.
Call (800) 331-4700 now. California workers’ compensation insurance specialists are here to help you.