Electrician insurance plans should all include a workers compensation policy unless of course you work alone and have no employees. And work comp policies can really punch a hole in your cash flow if not handled correctly. For more information on this, read my blog on the audit trap. In addition, there come times when work is hard to find and you may experience a drop in your cash flow. What if there were a program that would adjust your premiums to match your current work load and cash flow?
In fact this program exists and is available today. With a little understood tool called pay as you go, you can have your income cash flow better match your workers compensation premiums. Now understand that not every company that writes workers compensation policies for electricians can or will offer this feature, but if you can find one that does and if their price is right, this can be a nice benefit for electricians.
Let’s look at the mechanics of this type of work comp plan. Of course the details will vary from plan to plan, but the very best of them will send you an email or a mail reminder each month. You then log on to their web site and enter your payroll totals for the past month. The web site will then calculate your premium for that month and you can pay your bill on line right then and there with a credit card, or the system will generate a paper bill which is mailed to your office. What this means for you is that now your workers compensation expense tracks your payroll with only a 30 day delay. And this short delay means that your workers compensation expenses will more nearly track your revenue and mean less wild swings in your monthly cash flow.
Ok, there are a few things to watch out for here. First of all, there are some payroll service companies out there offering pay as you go workers compensation to go with their payroll service. On the surface this sounds great but there is a problem with this approach. One huge factor in your workers compensation insurance costs is your experience modification factor. And you need to work proactively to protect that mod to keep future costs lower. Companies that specialize in payroll services and sell work comp as a sideline are rarely as good at keeping claims costs low as companies whose prime mission is workers compensation insurance. These dedicated work comp companies will often have nurses and case managers on staff to help reduce your overall claims costs. And keeping your claims costs low will keep your rates low over time. To learn more about this read my blog on protecting your experience mod.
One last thing to mention here is that the pay as you go feature offered by some companies is often only available to electricians whose premium exceeds a certain level, often as high as $5000. There are a few companies out there who can offer this feature at a much lower premium level, but you will need to find an agent who specializes in electrician’s insurance to find them.
At Clinard Insurance Group, in Winston Salem, NC, we are the electrician insurance specialists. We have companies that can write pay as you go workers compensation policies for electricians with annual premiums as low as $1000. If we can help you with any of your electrician insurance policy questions, please call us, toll free at 877-687-7557 or visit us on line at our electricians’ insurance program policy page.
Some of the source material for this article was drawn from other blog articles which can be found at www.InsuranceAnswerGuy.com.
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