Home: Message List - Workers Comp Insurance Questions (Calculating into Overhead, Finding It, etc.)

Re: Workers Comp Insurance Questions (Calculating into Overhead, Finding It, etc.)

cutcomp — Thu, 23 Apr 2009 04:20:31 GMT

In Illinois and Missouri, Workers Compensation premium for almost all types of employment is based on a rate times $100 of payroll. There is a specific class (and manual rate) for millwright work, and it is fairly expensive. In Illinois, the actual manual rate used will vary from one insurer to another, unless the employer is in the Assigned Risk Plan. Many smaller or newer businesses end up being insured in the Assigned Risk Plan, as insurers are often unwilling to underwrite them in the "voluntary market." Although an employer can't be turned down by the Assigned Risk plan, the cost of insurance there is much more expensive than what it would be in the voluntary market. Any licensed property and casualty insurance agent in Illinois can access the Assigned Risk plan, but you would be much better off if you can find coverage in the voluntary market.

Re: Workers Comp Insurance Questions (Calculating into Overhead, Finding It, etc.)

aammari — Wed, 22 Apr 2009 04:39:47 GMT

If you are in california call this agency I got all my business insurance from they are very helpfull
altimainsurance.com good luck

Re: Workers Comp Insurance Questions (Calculating into Overhead, Finding It, etc.)

proInsurance — Wed, 26 Nov 2008 19:04:29 GMT

Payroll ( and your cost of subs - their payroll you pay them) for work comp is correct. I tiell my contracting clients to take the rate they pay for the classification; say millwrights 8.00 / $100 of payroll right out of their check, bank it, as you'll have to pay that amount at audit... unless of course they can provide a workers comp certifictae... but many can't.

Re: Workers Comp Insurance Questions (Calculating into Overhead, Finding It, etc.)

Lighthouse24 — Wed, 23 Jan 2008 05:39:39 GMT

Where a millwright code exists, it is generally an expensive classification. My suggestion would be to see an insurance auditor or consultant in who specializes in workers comp classification cases.

As for the second issue, I don't determine billable costs that way, so I can't comment -- but maybe other contractors do and can.

Re: Workers Comp Insurance Questions (Calculating into Overhead, Finding It, etc.)

cognitive77 — Wed, 23 Jan 2008 03:19:22 GMT

Here are some of my problems.

1. Insurance agents/brokers can't typically seem to find a classification code for Millwright work. It's not rocket science, as Millwright work tends to be pretty specific (working with nuts/bolts, welding, mechanical pieces of power plants).

2. Insurance rates are typically based on per $100 of payroll. How do other contractors here factor in insurance overhead in their rates?

Re: Workers Comp Insurance Questions (Calculating into Overhead, Finding It, etc.)

Lighthouse24 — Wed, 23 Jan 2008 02:56:38 GMT

I don't like shopping for insurance either (but you have to in order to keep rates competitive).

Both things you were told are correct -- just two different questions.

The three criteria that insurance companies generally use to determine the amount of an employer's workers comp insurance premiums are:
1. Payroll;
2. Employer Classification (premiums are higher if the types of workers you employ have an inherently higher exposure to injuries - e.g., roofers compared to secretaries);
3. Experience Modification Factor (or "mod" where an individual employer is compared with other employers within the classification based upon the frequency of accidents and severity of injuries - more incidents result in higher premiums).

The three criteria that insurance companies generally use to determine the amount of an employer's liability insurance premiums are:
1. Sales;
2. Type of Services Provided or Products Sold;
3. The Role of the Employer (in the process of providing the services or products).

Sorry, I have no recommendations for a specific carrier or underwriter, but you do generally get better rates if you make it an "all or nothing deal" when you ask for quotes (i.e., have agents or firms give quotes on the basis of underwriting all of your business insurance coverage, not just one type of policy).

Hope this helps. Best wishes.

Re: Workers Comp Insurance Questions (Calculating into Overhead, Finding It, etc.)

cognitive77 — Tue, 22 Jan 2008 02:13:15 GMT

My business is incorporated in IL, and we only do work in IL and MO (primarily MO).

Re: Workers Comp Insurance Questions (Calculating into Overhead, Finding It, etc.)

LUCKIEST — Mon, 21 Jan 2008 21:10:41 GMT

77, Welcome and good luck. You ask interesting questions. Workers Comp is usually based on payroll.
Where are you located (State) You say that you are a newer contractor.
O K.In business you have to spend money to make money. I am a QuicksBook Consultant
Everybody in business should have an Accountant, a Lawyer and an Insurance Agent.
There have been a few posts recently from Insurance agents looking for new clients.
Under Members you should add a few words about you and your business.
.
Good luck, LUCKIEST

Workers Comp Insurance Questions (Calculating into Overhead, Finding It, etc.)

cognitive77 — Mon, 21 Jan 2008 16:31:34 GMT

If there's one business expense I absolutely hate, it has to be shopping for insurance. I personally believe that any insurance is a mandatory scam. You need it, sometimes use it, but get the shaft when you have to use it or are penalized when you have to use it. But I digress.

I'm a newer contractor. We only work with Union Millwrights. I need workers comp and I'm assuming liability insurance for my crews. I've been told two different things. One, that the rate I pay for insurance is based off of payroll for that craft for the entire year, and Two, that it's based off of year end sales. Also, how exactly do I calculate insurance into my hourly rate that I bill for each worker? I'm looking for a base % I can apply to that rate. And lastly, can anyone here recommend a GOOD insurance contact?

Thanks.