I called up my business insurance broker and asked: What determine your Workman’s Compensation (WC) rate? Is it only your state rate or if you have injuries on the job does it go up?
- The Workers Compensation rates differ from State to State . If you think of workers compensation as a major medical policy the better the benefits the higher the premium . So States determine the coverage’s under their State workers compensation benefits act . The companies calculate the rates on the coverage’s afforded under each State’s workers’ compensation benefits based on the classification of your particular business/occupation /duties .
- In addition all the companies have their own rates so this is where you get one premium quotation better than another companies .
- How they classify you business ( under what code ) makes a difference . We use the 8831 kennel code for pet sitters and other companies use a different code . Sometimes the rates differ by $ 5.00 or more . ( kennel code being the lowest of the two ) .
- Injuries /claims. Any premium below $ 5000.00 will have a merit mod attached . The merit mods are as follows :
- Lost time claim 1.00 merit mod
- No loss time claims .95 merit mod
- Two or more loss time claims 1.05 merit mod
You take the merit mob times the base rate to determine the actual rate per $ 100.00 of payroll.
If your premium is over $ 5000.00 then you get into the experience rating and that is done through a rating service that most companies use . This would be too complicated to explain here in an email . But over $ 5,000.00 in premium and a bad loss experience your mod could go to a 1.50 or 2.00 and basically you would be paying 1.5 to 2X the standard rate . Most pet sitter’s premiums are under the $ 5000.00 annual premium .
Dennis A. Stowers, CIC
615 N Capitol Ave
Lansing, MI 48933
Toll Free 1-800-686-2663