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Proudly serving Miami since 1977
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4 Times to Review Your Company’s Workers Compensation Policy

Group Of Office Workers
Many small business owners may not realize under what circumstances they need to review their workers compensation policy. Although you defiantly don't need to review your policy every other day, there are a few key times when you should read over it. When the following four events occur, ask an insurance agent whether any changes need to be made to your company's workers compensation coverage.
1. Launch a New Sole Proprietorship
Many business owners who run sole proprietorships don't think about workers compensation coverage because that type of coverage is not legally required unless a business has employees. However, even if you aren't under a legal obligation to get coverage, there are good reasons to consider purchasing a policy when starting any new business — including a sole proprietorship that you run independently.
Standard health insurance policies frequently don't cover work-related injuries, so you could be left with a coverage gap if you're ever injured while running your business. Without workers compensation coverage — which covers work-related injuries — you have to pay for all your medical care out-of-pocket.
2. Hire a New Employee
Your company's workers compensation policy will need to be updated anytime your company hires a new employee. The insurance primarily benefits employees, so premiums are based on your company's staffing. When the staffing changes, the policy also needs to change.
Updating your company's policy to account for one or more new employees is an easy process, but there are a few details that the insurance company will need to know, including the new employee’s title, salary, and job description.
The title and job description will be used to assign a level of risk, which helps project how likely an employee is to be injured while working.
The updating process can be completed quickly because it's simple and straightforward. If possible, however, you shouldn't wait until the day before hiring an employee to check your coverage.
By looking for coverage as soon as you know the pertinent details, you can see whether your business can take advantage of subsidized programs like the Assigned Risk Plan. This program helps businesses in high-risk industries afford coverage. Not all businesses will qualify, but you should consider applying to see whether your company can reduce its premiums.
3. Let an Employee Go
Just as a policy should be updated when your company hires a new employee, coverage also needs to be adjusted when you let an employee go. Let your insurance company know of the staffing change as soon as you can after an employee is laid off, fired, or resigns. Your insurer will update your company's premiums, which may drop slightly because of the reduced staffing, accordingly. The sooner you tell your insurer, the sooner they can adjust the premiums.
4. Renew Your Coverage
Workers compensation policies are written for 12-month terms and are renewed after that year-long period when they expire.
When a policy is renewed, the insurance company conducts an audit to make sure the correct premiums were charged. This audit typically isn't a major ordeal. Your company just needs to send in its accounting records of how much people were paid. If your employees were paid more or less than expected, a refund or bill will be sent for the discrepancy.
While your business’s insurance company reviews the past year's policy, your business should also review its policy. A good policy for your company a year ago may no longer provide the right level of protection, especially if there have been substantial staffing changes. This period is the time to see whether coverage needs adjusting for the upcoming year.
For help reviewing your company's workers compensation insurance policy, contact Koski & Co. Insurance Agents.