Did you know that, although specific laws vary by state, workers’ compensation insurance is generally required of companies with W-2 employees? And while it is fairly complex, your Personal Insurance Advisors from the Townsend Insurance Group can help you navigate the waters and offer you clarity as to what workers compensation is and in choosing the right kind for you and your business.

The purpose of workers’ compensation insurance is to provide employees with proper compensation for job-related injuries or illnesses.

Many states use the standards of the National Council of Compensation Insurance to determine the rates of their workers’ compensation insurance. The NCCI, a non-governmental, private organization, uses classifications to determine the risk factors involved in particular jobs. The risk factor will obviously be greater with occupations such as mining and construction, and generally low for clerical workers.

Premiums are usually determined through a formula which includes a number of factors including salary, benefits and other variables.  A remuneration number is then arrived at.  It is used in conjunction with the risk factor classification of the job to arrive at the cost of the insurance. Premiums can also be adjusted by “experience modification factors”, which are standards set by the NCCI and other organizations for reducing premiums based on a company’s reputation.

The initial premiums are based on a number of prognostications including the amount of wages to be paid to workers.  At the end of the policy period an audit is performed to determine the actual premium amount.  The results of the audit can result in either a refund or additional premiums due.

Your trusted team at the Townsend Insurance Group will work with you to ensure you understand everything you need to know about workers’ compensation insurance.  We will take the time to evaluate your needs and ensure employees are properly classified.  This helps to minimize any surprises later on.

Please call us today to find out more about how we can help you with all of workers’ compensation insurance needs.


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