Almost all states require businesses with employees who are not owners to purchase workers’ compensation coverage. Failure to comply with these requirements could result in severe and costly repercussions for your business. Even if you feel self-sufficient in determining your coverage needs and administering and maintaining policies, you may not be aware of opportunities for improvement.
Automatic Data Processing Insurance Agency, Inc., (ADPIA®), an affiliate of ADP®, Inc., recently surveyed small and mid-sized business owners, as well as insurance carriers, and identified the following best practices for managing workers’ comp:
- Lean on insurance companies and licensed agents for help evaluating insurance needs and selecting the right coverage from a range of products.
- Regularly review your policies to confirm you have the necessary coverage or identify gaps that must be filled to mitigate risk.
- Enlist the help of your insurance carrier to limit worker classification errors, thereby reducing audit preparation time and the potential risk of variances, fines and penalties.
- File workers’ comp claims as close to the incident as possible and comply with state laws for a faster and potentially less expensive resolution.
- Monitor, document and report employee changes during the policy term to make it easier to get through audits.
- Use a “pay-as-you-go” solution based on real-time payroll data and carrier rates for more efficient, accurate premium payments and less variance at audit time.
