Here Are The Types Of Workplace Injuries That Cost Employers The Most Money – Is Your Business Vulnerable?

When a worker becomes sick or injured on the job, the ways that this event can impact the bottom line of that business are many and varied.   Of course there are the cost associated with the down time your business may experience while that worker is at home recovering, but there is also the possibility of lost revenue due to lost business that you can’t engage in if you need that employee to get the work done.  And don’t forget that workers compensation insurance policies are experience rated so that means that your past losses will affect the rates that you pay in the future.  OSHA tells us that injuries and illnesses cause increased absenteeism, decreased productivity and reduced morale among the non-injured workers.   All of the effects can be expensive to a small business owner.   But among all of the types of workplace injuries, some in particular are more costly than others.   If your business model leaves you vulnerable to losses of these types, then this is a wakeup call for you to take protective action to prevent  these most expensive types of losses from happening to your company.

There are 5 types of injuries that currently account for 72% of all the direct workers comp costs for employers in the U.S.  These types of accidents  cause losses totaling over $35.7 billion dollars each year.  They are, overexertion, fall to the same level, fall to a lower level, bodily reaction, and struck by an object.  Take just a moment and think about each of these types of accidents, one at a time to determine if your business is vulnerable to that kind of loss anywhere in your work processes.    Once you have done this, think even more carefully about ways in which you could establish changed procedures or different workflow strategies that might help prevent that type of accident.

This is a big job and requires some out of the box thinking to imagine what might go wrong to lead to a loss of any of these types.  The good news is that there is professional help available to you to accomplish this.  Some insurance companies sell only workers compensation insurance policies and often those insurance companies offer a rich and inexpensive buffet of services and programs to help you evaluate and prevent injuries to your employees.  According to the U.S. Department of Labor,   employers can save $4 to $6 for every $1 spent on safety and health programs.  Also, workplaces with successful safety and health management systems are usually able to reduce injury and illness costs by 20% to 40%.  If you consider that overall lost productivity just from lost productivity due to injuries and illnesses in the U.S. costing companies an estimated $60 billion per year, you can readily see that taking a moment to consider loss prevention for your business could have an enormous effect on your bottom line.

I advise that you check in with yourself on these most costly types of injury causes, then check in with your workers compensation insurance company to see what they can offer you to help you prevent them.  If you find that your insurance company is not particularly helpful, or if they don’t have a rich offering of tools and knowledge to help you prevent more injuries, then I suggest you start looking for another workers compensation insurance company.

At Clinard Insurance Group, located in Winston Salem, NC,  we represent a number of workers compensation insurance companies who specialize in this type of coverage only.  They have ways to help you reduce and prevent injuries in the first place, and they also have tools and knowledge to reduce the overall costs of injuries once they occur. If your business is located in North Carolina, South Carolina, Georgia, Tennessee or Virginia, then give us a call, toll free at 877-687-7557 and put us to work for you today to lower your workers compensation costs, both now and in the future.

NC Workers Compensation Insurance Standoff – the Industrial Commission Blinks

Workers compensation insurance was designed as a compromise to keep businesses running and to more quickly return injured workers back to the job.  The simple agreement took away most of the employee’s rights to sue the employer and in response they were guaranteed certain benefits if injured, made sick or killed on the job.  The rules of the North Carolina Workers Compensation System have been presided over by the NC Industrial Commission.  These rules have favored the employer over the employee for quite some time now and this month the Industrial Commission showed once again that their sympathies lie with the employer over the injured employee. 

In early May, 2012, Governor Bev Perdue ordered a swift reform of our system.  She was made aware of a number of claims filed by injured employees against their uninsured employers that have gone unpaid for years.   In a show of strong action, the North Carolina Industrial Commission rounded up about 100 delinquent employers and threatened them with jail time should they not pay their injured employees what they are due.  It was beginning to look like the unpaid injured employees were finally going to be treated fairly by their government.

But let’s back up a bit.  If the employer’s part of the work comp bargain is to carry a workers compensation insurance policy, then how did we end up with so many uninsured employee injuries?  This can happen in several ways.  An employer could fail to make a payment and have its work comp insurance policy cancelled.  Or they could just decide to drop the coverage or never buy it in the first place since the NC Industrial Commission has never set up a system for finding the uninsured employers out there.  Or, they may simply not have to buy a policy due to a crazy rule in North Carolina.  This rule states that if you have less than 3 employees, you don’t have to purchase a policy if you don’t want to.  If you don’t buy a policy though, you still have to pay for all loses that occur to your employees just as if you were the insurance company.  This rule makes no sense to me.   Why should a small employer be more able to pay for on the job injuries of its employees than a larger employer?  I would think that a small employer is even less likely to have the assets needed to pay a claim.  NC is one of the few states with such a silly rule and to go along with this, NC also has one of the most lax enforcement of the workers compensation rules that you will find.  It is estimated that in NC there are as many as 10,000 employers with no insurance coverage at all.

With Governor Perdue’s new initiative to find the scofflaws and make them pay or go to jail, there was a glimmer of hope that someday we might not hear any more of these sad stories where an employee is maimed for life and the employer, not having purchased any workers compensation insurance, claims that he has no assets to pay the claim.  But now, as we saw this week, when push came to shove, the North Carolina Industrial Commission chose the welfare of the employers over the injured employees.  No employers were thrown in jail, those that couldn’t or wouldn’t pay what is owed to injured workers were granted extensions to make good on their settlements.  Businesses can now flaunt the law and not purchase work comp insurance and do so with impunity.  Will the Industrial Commission find ways to identify them and force them to obey the law like other states do?  Will they change the law to force all employers with any employees at all to purchase a policy to protect what they don’t have the assets to protect?  I doubt it.

Clinard Insurance Group, located in Winston Salem, NC insures thousands of small businesses all across the state.  We urge every business with any employees at all to buy a workers compensation insurance policy to protect their assets and their employees.   If you would like help with your workers compensation insurance, please call us toll free, at 877-687-7557.

Mono-line Workers Compensation Insurance Companies – What Is It They Can Do Exactly?

Readers of my blog know that preach buying your workers compensation insurance policy from an insurance company that sells only workers compensation and no other types of policies.  This is because I have found that with their expertise and understanding of this insurance product they can reduce claims costs, and help get your employees back to work more quickly.  All of this helps them keep their rates low and save you money on your first policy with them as well as on your renewal policy.      Today I want to drill down deeper into this issue and help you understand what these extra services are and why they will cut your claims costs and save you money on your workers compensation insurance rates.  That way, when you are considering one of these insurance companies for your business, you will know which questions to ask.  Take it from me, not all of these mono-line workers compensation insurance companies are created equally.

To start, consider how these insurance companies often have an in depth medical bill review process for all medical claims.  The most talented at this have found that there are huge savings to be found simply by reviewing and challenging the medical bills themselves and their tricky coding.  Applying national guidelines for coding edits can often reveal huge savings by stopping some of the catch all codes where billing inaccuracies are often dumped.  One insurance company recently reported that unbundling overcharges found by in house bill reviews saved 49.8% on medical costs for an average claim.  Carefully applying medical limits and rulings to fees also generated savings of 38.46% on physician fee schedules.    Verifying the diagnosis according to medical records and examining medical records to ensure bill coding accuracy saved additional money on the medical portion of claims.

Now let’s take a look at some of the service options that have also proven to reduce the costs of workers compensation claims.  Companies that offer an online notice of injury and fast claims reporting have seen huge reductions in claims costs.  To learn how fast reporting cuts claim costs, read my blog on that topic here.   Another money saving approach has been to assign one claims adjuster to each company for all claims.  Imagine how having the same claims adjuster on every claim will cut down your time in claims processing and help you build a relationship with someone who will be working hard to help you reduce your claims costs and prevent claims from happening in the first place.  Implementing  proactive return to work programs that get the employee back to work in some kind of capacity sooner have proven to save the employer money both in terms of claims costs but in down time and replacement worker costs.  This not only shows other employees that you care about them, this also has the added benefit of getting the injured employee back to work full time much more quickly.    And many of these insurance companies employ highly trained and very experienced special investigation units.  These units investigate possible fraudulent claims to control unnecessary expenses associated with these kinds of claims.

Many employers who stumble on to a mono-line workers compensation insurance company to protect their business may only see the lower price on the front end.   And that can be a trap as often a mono-line workers comp company may come into a state with lower rates in an attempt to buy up business before raising their rates in years 2 and 3.  But to save you money today and tomorrow, an insurance company needs to be proactive in implementing techniques and training that will help reduce the frequency and severity of future claims as well as to reduce the costs of a claims that have already occurred.   

At Clinard Insurance Group we represent several fine mono-line workers compensation insurance companies that can save you money on your workers compensation insurance both today and tomorrow.  We insure hundred and hundreds of small businesses all across North Carolina and South Carolina.    If you would like help with your workers compensation insurance policy, please feel free to call us, toll free, at 877-687-7557.  

Workers Compensation Insurance – When It Comes To Claims, Time is Money

The old adage that time is money is certainly true when it comes to handling workers compensation claims. While the Form 19 claims form no longer states that the claim must be filed within 5 days of the accident or injury occurrence, moving fast on a workers compensation claim has a big impact on the size of the claim and the subsequent loss costs that will affect the employer. If you are an employer with employees and have a workers compensation policy, you should take a little bit of time before a claim happens to discuss with your agent what you will need to do to move the claim forward quickly.

Take a quick look at some insurance industry statistics related to the speed of claims reporting.

Claims reported two weeks after the occurrence had an 18% higher payout than claims reported in the first week.

Claims reported three weeks after the injury had a 47% increase in total loss costs over those reported in the first week.

And to drill down further, claims reported in days 5 through 7 after the occurrence had a larger claim cost than those reported in days 1 through 4.

Claims reported with only a 3 day delay had an increased medical cost of 16% over those reported on the day of the occurrence.

And we can also see this trend in terms of litigation costs associated with late reporting of workers compensation claims. Claims with a only a 3 day delay in reporting have a 50% greater chance of ending up in litigation. And litigation will increase the total costs of the claims and drive up your workers compensation premiums over time. To see how claims costs affect your premiums, click here.

So how does quicker reporting help to reduce the costs of a workers compensation claim? First of all, it allows the insurance company to contact all parties involved more quickly and this reduces the costs and chances of litigation. Once the injured worker has hired an attorney to represent him, then the claims process slows down considerably as the communication process now has another step involved. Quick claim reporting also allows the insurance company to get involved with the injured worker sooner and begin to develop plans to get the injured worker back to work in a shorter time. This not only reduces the costs of your future workers compensation claims, but it also cuts your downtime costs right away.

Last of all, consider that the longer the employee is out of work, the greater the burden on other co- workers in your company. This negative impact can hurt morale and can also lead to a higher risk of injury to the remaining workers on the job. In addition, hiring and training a temporary replacement worker can be very expensive.

At Clinard Insurance Group, in Winston Salem, NC we want all insurance buyers to be informed consumers. Looking only at the policy costs can be a deceiving way to purchase insurance and might leave your company out in the cold. If we can help you with your business insurance, your workers compensation insurance, your general liability insurance, commercial auto insurance or life insurance, please call us, toll free at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.

The source information for this article was pulled from other articles that can be found in their entirety at www.InsuranceAnswerGuy.com.

Social Media Becomes a Tool In The Fight To Reduce Insurance Fraud

A young man brags on facebook about sinking his car in a lake before he reported it stolen. A carpentry company creates a promotional video for youtube which shows their workers installing roofing material. Another youtube video shows people ramming a van into a tree over and over again. You can even view some stage accident videos by NICB here. For some reason, people just don’t think that social media is a tool that insurance claims adjusters can use.

Studies indicate that at least 10% and perhaps more of all property and casualty insurance claims are fraudulent. The National Insurance Crime Bureau estimates that workers compensation fraud alone costs as much as $5 billion per year. This cost is added into so many of the products that you and I purchase every day. But fraud has a new enemy now and it is called Social Media. The social media sites like youtube, twitter, facebook and others are a great place for claims adjusters to spend time checking up on their claimants. And underwriters use them as well. In the case of the carpenter showing his employees working on a roof, he now has some explaining to do to his underwriter since he signed an application indicating that he does not engage in any roofing activities.

It is surprising how people are willing to incriminate themselves on these social media sites. Underwriters are now better able to identify the types of customers who are prone to fraud by studying their social media and internet footprints before they agree to write a policy for them. And of course today’s claims adjuster is finding the social media universe to be easy pickings for proving fraudulent behavior on some claims.

Over time, the fraudsters out there will be a bit smarter and in truth, social media is not the place to catch the real professional crook. But it is having an impact on helping to keep your insurance rates just a bit lower over the near term.

At Clinard Insurance Group in Winston Salem, NC, we work hard to help insurance consumers out there become better informed buyers. If we can help you with your home insurance, your auto insurance, your business insurance or even your life insurance, I hope you will call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.

The source information for this article was pulled from other articles which can be found in their entirety at www.InsuranceAnswerGuy.com.

Workers Comp Back To Work Issues – Avoid These Common Mistakes

Workers compensation insurance is a necessary evil for most employers. How you handle on the job injuries and more importantly how you handle the out of work situations that you will face with your employees will go a long way toward impacting your future workers compensation costs. Read below to see some common mistakes that some employers make in this regard and what you can do as an employer to avoid these mistakes and minimize your future workers compensations costs.

The first step towards understanding back to work issues is to understand why it is important for you to be involved. Some employers take the attitude that the claim has been filed and it is the insurance company’s money now so why worry about it. This belief couldn’t be farther from the truth. This is in fact your money as your future rates are determined by today’s claims experience. And to make matters worse, you will pay over a 3 year period for any one year’s mistakes to the impact is essentially tripled. Click here to read my blog about the workers compensation experience modification factor and how it affects your bottom line now and in the future. Now bear in mind that workers compensation rules are different for every state but this is a guideline that can help you avoid some common errors that employers often make.

Mistake #1 – The Economy is bad and I can’t afford to keep employees on the job who are not able to do the job. Actually, you can’t afford not to. Remember, if you are not able to make an offer of light work to an injured employee then your employee will likely continue to receive a good part of their salary as work comp benefits from your insurance company while contributing nothing to your company. Other employees will have to pick up the slack or you may have to hire and train new workers. Research shows that healing happens faster for employees who are productive and that a transitional duty program can get them back to work quicker and save you more money in the long run.

Mistake #2 – My injured employee wasn’t all that productive before the injury so I’d rather not keep him on with light duty now that he is injured. Don’t fall into this trap. Dealing with non-productive employees is a human resource issue, not a workers compensation issue. You should always deal with this type of problem through your HR department. Also, a less productive employee is more likely to take a case through the long and costly workers compensation legal system. Get them healthy and back to work first, and then deal with their lack of productivity.

Mistake #3 – I don’t think my employee is hurt as bad as he says, in fact I saw him out fishing last week. This is an example where the insurance company you choose can help or hurt you. You are often best served by a dedicated workers compensation company with a structured back to work program. One of the insurance companies that we use, Summit Insurance Group, has a back to work tool kit and structured back to work program to help you as an employer get your injured employees back to work and off the work comp rocking chair paycheck as quickly as possible. This is not something you should tackle on your own and you need an insurance company that is dedicated to this process so that your premiums stay low in the future.

Mistake (Concern type) #4 - My employees doctor says she should stay at home but she just has a desk job. You should work with your claim adjuster and your employee to make sure that the doctor has a clear understanding of the job requirements to see if the person really must be written out of work. Constant and clear communications between you, the employee, the doctor and the claims department can help you resolve these issues and some job modifications may make it possible to get your employee back to work sooner. Remember to get your employees job description to their physician as quickly as possible and ask for any medical restrictions that need to apply to any transitional duty.

Mistake #5 Losing touch with workers once they are injured increases the fear of a lawsuit. This is true and many employers find themselves in a nether world where they are afraid to contact their injured employee and wanting to know what is going on with the injury. This is why having a back to work program in place before the injury occurs is so important. A good back to work program will encourage you to reach out to your injured employee and help you know what you can and can’t say and how to say it. They even include greeting cards that you may want to send to let your injured employee know that you are thinking of them.

It is clear that having a plan for injured workers before they are hurt will help you make the transitions more smooth and over time will reduce your workers compensation costs tremendously. You should choose an agent who understands workers compensation insurance well and can help you gain access to specialized workers compensation insurance companies with back to work plans, dedicated claims staff and even nurses on call, all of which will help you reduce downtime and out of work time for your employees. Don’t just chase the lowest priced workers compensation rates, rather consider carefully what support you will have after a claim when choosing your workers compensation agent and company.

At Clinard Insuranc e Group in Winston Salem, NC, we specialize in helping all kinds of businesses with their workers compensation insurance needs. Our specialization can help you not only find extremely low rates on your workers compensation insurance, but also will help you minimize claims and out of work time, thus saving you money over the long haul as well. If you need help or have questions about your North Carolina Workers Compensation Insurance Policy, please call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.

The source information for this article was pulled from various sources, one of which is www.InsuranceAnswerGuy.com.

Auto Repair Shops Workers Compensation Insurance – Protect Your Mod

Most automotive repair and body shop owners have at least a general knowledge of workers compensation insurance. They know that they need it and they know it can cost a lot of money. But only a few really understand the experience modification factor and what it could mean for their future work comp insurance policy costs. This little primer will help you understand just how important it is to protect your mod and how to do it.

The experience modification factor of workers compensation policies, referred to as the experience mod or just mod for short, is the insurance industry’s way of assigning higher rates to businesses with poor loss experience and lower rates to those who have had more favorable loss experience. Each business has its own unique experience modification factor and this factor is applied to the rates on their policy. For example, if you have had a lot of losses, or perhaps a few large losses, you might find yourself with a mod of say, 1.35. If this is the case, then your workers compensation insurance policy premium will be adjusted upward by 35% to reflect your bad experience. Likewise, if your company hasn’t has a work comp loss for several years, your mod might drop as low as .80 and this would mean a 20% reduction in your overall workers compensation policy premium.

So how is this mod calculated? Well, the first thing you need to know is that the mod is calculated based on past experience. That means what happens today will take several years to come back and bite you. Also, the experience period for the mod in North Carolina is 3 years, so once you get some losses in your mod calculation, they will stay there for a while. I want to leave a more detailed explanation of how the mod is calculated to a later blog, but for now, understand that it is not only the number of losses (called frequency) that plays a part, but also the amount paid out (called severity) that impacts the mod calculation. And a little of both, frequency and severity can really run up your mod.

So what can you, as a business owner, do to protect your mod? A lot of how your mod will affect you, both good or bad will be determined by which insurance company you choose for your workers compensation policy. I say this, because, although you may be as careful as you can to avoid injuries among your workers, there is no substitute for an insurance company that is actively working for you to help you prevent claims and reduce the severity of existing claims. So when evaluating which workers compensation policy to purchase, you should consider more than just the cost on the first policy. Find out what that insurance company and that agent are going to do to keep your costs low over the long term.

Choose a workers compensation insurance company that will work with you to help you with both prevention and severity reduction. Prevention can come in the form of safety inspections, and loss control techniques that the insurance company can share with you. Reduction can come in the form of programs that help your injured workers get back to work more quickly. Some of the best workers compensation insurance companies even have their own nurses and doctors. Also, you want to purchase your workers comp coverage from a company that assigns case managers to each claim to stay on top of all the medical bills and the disability payments to keep the payout as small as possible.

At Clinard Insurance Group, in Winston Salem, NC, we specialize in helping the owners of automotive repair and body shops navigate the complex waters of insurance policy and insurance company selection. We can help you find a pro-active insurance company that will help you reduce the number of work comp claims and keep the claims that happen from spiraling out of control. We can also help you with your other insurance needs from garage insurance to commercial auto insurance for your wreckers or company trucks. If you would like help with any of your business insurance needs, please call us, toll free, at 877-687-7557 or visit our garage owners insurance help page.

The source information for this article was taken from other articles which can be found in their entirety at www.InsuranceAnswerGuy.com.

Contractors Workers Compensation Insurance – Protect Your Mod

Most contractors have at least a general knowledge of workers compensation insurance. They know that they need it and they know it can cost a lot of money. But only a few really understand the experience modification factor and what it could mean for their future construction company insurance policy costs. This little primer will help you understand just how important it is to protect your mod and how to do it.

The experience modification factor of workers compensation policies, referred to as the experience mod or just mod for short, is the insurance industry’s way of assigning higher rates to businesses with poor loss experience and lower rates to those who have had more favorable loss experience. Each business has its own unique experience modification factor and this factor is applied to the rates on their policy. For example, if you have had a lot of losses, or perhaps a few large losses, you might find yourself with a mod of say, 1.35. If this is the case, then your workers compensation insurance policy premium will be adjusted upward by 35% to reflect your bad experience. Likewise, if your company hasn’t has a work comp loss for several years, your mod might drop as low as .80 and this would mean a 20% reduction in your overall workers compensation policy premium.

So how is this mod calculated? Well, the first thing you need to know is that the mod is calculated based on past experience. That means what happens today will take several years to come back and bite you. Also, the experience period for the mod in North Carolina is 3 years, so once you get some losses in your mod calculation, they will stay there for a while. I want to leave a more detailed explanation of how the mod is calculated to a later blog, but for now, understand that it is not only the number of losses (called frequency) that plays a part, but also the amount paid out (called severity) that impacts the mod calculation. And a little of both, frequency and severity can really run up your mod.

So what can you, as a business owner, do to protect your mod? A lot of how your mod will affect you, both good or bad will be determined by which insurance company you choose for your workers compensation policy. I say this, because, although you may be as careful as you can to avoid injuries among your workers, there is no substitute for an insurance company that is actively working for you to help you prevent claims and reduce the severity of existing claims. So when evaluating which workers compensation policy to purchase, you should consider more than just the premium on the first policy. Find out what that insurance company and that agent are going to do to keep your costs low over the long term.

Choose a workers compensation insurance company that will work with you to help you with both prevention and severity reduction. Prevention can come in the form of safety inspections, and loss control techniques that the insurance company can share with you. Reduction can come in the form of programs that help your injured workers get back to work more quickly. Some of the best workers compensation insurance companies even have their own nurses and doctors. Also, you want to purchase your workers comp coverage from a company that assigns case managers to each claim to stay on top of all the medical bills and the disability payments to keep the payout as small as possible.

At Clinard Insurance Group, in Winston Salem, NC, we specialize in helping the owners of small contracting companies navigate the complex waters of insurance policy and insurance company selection. We can help you find a pro-active insurance company that will help you reduce the number of work comp claims and keep the claims that happen from spiraling out of control. Because contractors insurance is our specialty, we can help you with your insurance needs whether you need help with carpentry insurance, carpet cleaner insurance, electricians insurance, flooring insurance, HVAC insurance, grading and excavating insurance, insulation insurance, landscaping or lawn care insurance, masonry insurance, painters insurance, plumbers insurance, siding insurance or even guttering insurance . We have built special niche programs for many different types of contractors and we encourage you to call us, toll free, at 877-687-7557 or visit us on the web at www.TheContractorsHelper.com.

The source information for this article was taken from other articles which can be found in their entirety at www.InsuranceAnswerGuy.com.

Construction Insurance in NC – small contractors, don’t forget your work comp insurance

I hear it so often with artisan contractors, they don’t think they need workers compensation insurance because they have too few employees or the general contractor that they work under provides that coverage. While these are reasons that allow them to legally avoid buying a policy, in both cases they leave the artisan contractor’s destiny in the hands of others and may ultimately cost the small contractor his or her business. Here’s the real scoop on workers compensation insurance in North Carolina for small contractors.

It doesn’t matter which area you work in, whether you are hunting for painter insurance, plumbing insurance, lawn care insurance, carpenter insurance, landscaping insurance, grading insurance or even insulation or flooring insurance, you really will do better to always purchase a work comp policy for your small contractor business. Let’s take a look at the three reasons people don’t purchase workers comp insurance for their small business.

Reason #1 - Less than 3 employees. While it is true that in North Carolina, if you have less than 3 employees, then the state will not require you to purchase a workers compensation insurance policy, what is seldom said in the next sentence is that whether or not you buy insurance, you are still on the hook for the claims. The workers compensation insurance policy was created as a compromise. Workers gave up their rights to sue their employers in most cases and the trade off for them was that employers agreed to pay the benefits associated with injuries and sicknesses on the job according to the statutory payouts required by each state. So, as the employer, you will have to pay for your employees job related injuries, sicknesses and time out of work in accordance with the NC workers compensation statutes. If they are permanently disabled or even out of work for several months, these costs could run into the tens of thousands and possibly close your business. Many small contractors are choosing not to buy workers compensation insurance based on their number of employees and this could have a devastating effect on their business.

Reason #2 - It costs too much. Let’s face it, workers comp insurance can be expensive. But if you have an agent that specializes in your type of business, then you will have a much better chance of getting your policy set up in a way that saves you the most money while still protecting you from financial ruin. And really while the short term costs may seem high what is your entire business worth?

Reason #3 - The general contractor covers it. While for some small contractors, this may be true, there are several reasons why this is a poor choice. First of all, if the general contractor were to go out of business, or let their insurance cancel through some error, then you are back on the hook and if the claim is large enough, then there goes your company. Also, if you do work not associated with that contractor then you are back to going bare. Secondly, most general contractors add a large premium to the rate that they are charged to carry you on their policy so you will probably find you are paying more than you should to be covered this way.

In almost every case, it is a better choice for small, artisan construction companies to purchase their own workers compensation insurance policy directly. The risks associated with going bare, or riding on the general contractor’s coat tails are just too high.

At Clinard Insurance Group in Winston Salem, NC, we specialize in helping small artisan contractors of all types with their insurance needs. We have special insurance programs designed for carpenters, carpet cleaners, concrete and masonry construction, electricians, flooring installation companies, grading and excavating contractors, guttering and siding installation companies, HVAC companies, landscapers and lawn maintenance companies, painters and plumbers. We work hard to help all of our clients become informed insurance buyers. If we can help you with your business insurance needs, please call us, toll free, at 877-687-7557 or visit us online at www.TheContractorsHelper.com.

The source information for this blog article was pulled from information which can be found on line at www.InsuranceAnswerGuy.com

Construction and Building Contractors – How should you define an Independent Contractor?

It’s really the nature of the business in construction. Whether you are a brick mason, a carpenter, a painter, a plumber, or even a landscaper, from time to time you will find yourself in the position of needing to hire a subcontractor. But how you define an independent contractor and the way the law and the insurance industry define this term might be very different. It is important for you to get this right, not only for your workers compensation and general liability insurance, but also for the protection of your business and perhaps your personal assets. And here is a clue – you don’t get yourself off the hook simply by providing a 1099 instead of a W2.

It is very important that you handle the interaction of your general liability insurance policy and your workers compensation insurance policy with your subcontractors. I have covered strategies of this type in previous blogs, whether it be the impact on your insurance audits, or the increased risks that subcontractors add to your business. This article is not intended to tackle those areas. Instead, here I want to really focus on the definition of an independent contractor so that you don’t make the mistake of treating an employee as an independent contractor and increase your business risks as a result.

While there is no clear basis for making the determination of who is an employee and who is an independent contractor in the eyes of the law, here are a few relevant factors that you should consider.

Who sets the hours of work? If the employer does, then it is more likely that the worker will be determined to be an employee. Does the employer provide training for the job? If so, this points more to an employer/employee relationship. Is the worker paid by the job, or paid by the hour. Hourly workers are much more likely to be viewed as employees. Can the person work for more than one firm at a time? If not, perhaps they are really an employee. Who furnishes the tools or materials needed for the job? If it is your company, then you may be dealing with an employee, rather than an independent contractor. Is the work part of the regular business of the employer? This one seems a bit vague but if you are hiring people to do the regular and usual work of your company, then they are most likely employees.

At Clinard Insurance Group, in Winston Salem, NC, we specialize in helping all types of construction contractors with their general liability insurance, workers compensation insurance and all other business insurance needs. We want our contractors to be informed consumer and help them run their business using best practices that help reduce risks to their assets. If you are in the construction business and would like help with your business insurance needs, please visit us on the web at www.TheContractorsHelper.com, or call us, toll free at 877-687-7557.

The source information for this article was drawn from articles which can be found at www.InsuranceAnswerGuy.com.

Contractors – 5 Tips For Getting The Best Audit Outcome On Your General Liability And Workers Compensation Insurance Policies

All building contractors working in North Carolina who carry either a NC general liability insurance policy or a NC workers compensation insurance policy, or both, probably know that these insurance policies are subject to an annual audit. What few contractors understand is that they have the power to stack the deck in their favor when it comes to that audit. And since some of the audit process is subjective, this can mean money in your pocket if you are a building contractor. Here are 5 tips that will put you on the road to more successful insurance audits.

Let me start by emphasizing that insurance auditors are people just like any other. If you grease the path for them and make their job easier, then they are much more likely to cut you some slack in the audit process and this can end up saving you a lot of money. So, what are those 5 tips?

Tip # 1 – Have Those Insurance Certificates Ready. I just can’t preach this enough. Do not allow any subcontractors on to your job site until they have provided you with a current certificate of insurance. And more than that, be sure that the limits on their general liability insurance policy are at least equal to your own policy limits. And if you have a workers compensation policy, make sure that their certificate shows that they have one as well. Last of all, check the policy dates on the certificate to be sure that they are current and active. If any policies will run out while these subs are still on the job, make sure that you also obtain an updated certificate. Put copies of all of these certs in your audit file. If the auditor shows up at your office and you don’t have your certs ready, he will charge you for the subcontractor payroll and leave it up to you to fix it later. And usually, fixing it later takes a lot more of your time.

Tip #2 – Take Some Time To Study Your Classifications. First of all, take the time with your agent to understand all of the classifications on your general liability insurance policy and your workers compensation insurance policy. Make sure that you understand the nuances of each class code and that your policy is set up accurately. If you are going to fudge the gray area between two similar classifications, understand that you might not get it past the auditor and you should have funds ready should you fail.

Tip #3 - Have The Audit Done and Ready To Hand Over. Once you have done your homework on your classifications, set up a spreadsheet to dump the payroll for each employee each week into the correct classification. You will want to keep a spreadsheet for both the workers compensation and the general liability policies. If you have done this correctly, you will be able to hand that spreadsheet over to the auditor and essentially all of the auditor’s work is done. This is more likely to keep them from digging around in your books to find new problems to share with the underwriters that can cost you in increased premiums.

Tip #4 - Keep The Overtime Payroll Separate. The NC workers compensation insurance policy allows you to avoid paying premiums on the extra overtime pay. But, to keep from paying work comp rates on this payroll, you must have it segregated. I suggest that you add a column on the work comp spreadsheet that you are keeping to show the amount of payroll that is overtime bonus and deduct it from the total payroll for each classification.

Tip #5 - Always Schedule the Audit for Friday Afternoons. This one may sound a little goofy but it works. If the auditor shows up at your office on Friday afternoon, and you can put all the information in his hands with up to date spreadsheets and copies of all subcontractor certificates, then he is more likely to accept your figures and get on home for the weekend. The less time he spends digging around in your books and your operations, the less likely he is to find a surprise that the underwriter doesn’t like which means higher insurance costs for you.

At Clinard Insurance Group, in Winston Salem, NC, we specialize in helping all kinds of contractors with their insurance needs, from general liability insurance and workers compensation insurance to commercial auto insurance and equipment insurance. If you would like help with your commercial insurance program, please feel free to call us, toll free at 877-687-7557 or visit us on the web at www.thecontractorshelper.com.

The information for this article was pulled from source information found at www.insuranceanswerguy.com.

Contractors – Prepare For The Impact Of Your Uninsured Subcontractors

Uninsured subcontractors are often just a necessary evil in some types of construction jobs. But if you are the contractor who is hiring extra help, and this help is uninsured, you should know what you need to do on the front end to be sure that this cheap labor option doesn’t turn out to be the most expensive help you’ve ever hired. Understanding exactly how uninsured subs will affect your general liability insurance policy and your workers compensation insurance policy is key to reducing your risks and your costs. At Clinard Insurance Group in Winston Salem NC, we specialize in helping all kinds of contractors with their construction insurance policies. And we want to make sure that all of our insurance clients avoid the nasty surprises that often come along with hiring uninsured subcontractors.

There are really three ways that the subcontractors that you hire that have no insurance policies in force can hurt you. The first is the classification audit trap. The second is the insurance coverage punch, and the third is the out of control large loss problem. Let’s take them one at a time.

First up is the classification audit trap. Two of the main insurance policies for contractors are the general liability policy and the workers compensation policy. The North Carolina general liability policy and the North Carolina work comp policy both compute the premium due by using payroll as the rating basis. If you hire a subcontractor to work for you, you can provide a certificate of insurance for that subcontractor and anything that you have paid that subcontractor will not be charged against you as payroll at the end of your policy term when the policy is audited by the insurance company. Likewise, if you can’t provide a certificate of insurance for that sub, then you are going to have to add the entire job cost paid out to that sub as payroll. You can protect yourself against this going in by withholding an amount for insurance from the payment you make to the sub. But, beware, the general liability policy and the workers compensation policy both have different rates for different kinds of work. If you are a carpenter and you hire a roofing contractor to work for you to do roofing work, you won’t be protected from the audit trap by using the rate shown on your policy. That’s because the rate for the roofer is much higher than that for a carpenter. If you are unsure of what to withhold, either demand that your sub get insurance, or call your agent to find out what the correct amount per $100 of payroll should be withheld. As you can see, this is a tricky business and if you don’t pay attention to the details and do your homework, you will get burned and will be overpaying for your general liability and workers compensation policies.

Now let’s take a quick look at the insurance coverage punch. Hiring an uninsured subcontractor is a big no no from the insurance company underwriter’s viewpoint. This is because the underwriter immediately assumes that you don’t have the same control over a subcontractor that you do over your own employees. This means that losses are more likely from an uninsured subcontractor. The underwriter will view your uninsured subs as big liabilities that make you a less attractive risk to the insurance company. This means that when your audit comes in with uninsured subs listed, the underwriter will be less generous with discounts and you may actually see your rates go up for all of your insurance policies from you commercial auto to your general liability to your workers compensation policy. Once again the real message to you is that you should not hire uninsured subs.

Last of all, we have the out of control large loss problem. While you might want to argue against it, statistically is it true that you have less control over your subcontractors. And that not only means that they are more likely to cause losses on your policies, it also means that they are more likely to generate losses which are not covered by your policy. Does your policy have an exclusion for the type of work they are doing? Will the losses they cause exceed your coverage limit? The answer to both of these questions could well be yes. Ask yourself why your uninsured subs don’t have insurance protection. Is it because they are deemed uninsurable by underwriters? If so, why are you letting them have a free ride on your policy at the risk of damaging your ability to purchase insurance in the future?

The truth is that hiring an uninsured contractor to work on your projects is risky and in some cases just plain costly. If you can avoid this type of practice you will be better off from and insurance standpoint every time. At Clinard Insurance Group in Winston Salem, NC, we work hard to make sure that our contractors understand the ins and outs of their policies and the best practices they should put in place. If you have any questions about workers compensation insurance, general liability insurance or any other business insurance policy, please feel free to call us, toll free, at 877-687-7557 or visit us on the web at http://www.ClinardInsurance.com.

The source information for this article was drawn from the informative blogs at www.insuranceanswerguy.com

Contractors – Don’t Forget Those General Liability Insurance Certificates

I work with contractors every day, helping them with their general liability and workers compensation insurance policies and I am struck by how many of them have heard of insurance certificates but how few really understand why they need them. If you have anyone working on your job site without first having given you a certificate of insurance, you are probably increasing both your insurance costs and your liability exposure. Here is a quick guide on what you need and why you need it when it comes to certificates of insurance.

As you probably know, your general liability and workers compensation policies are both rated based on the payroll your contracting business generates each year. And if you don’t know it already, you will soon: That payroll is audited each year and your insurance policy premium is adjusted to reflect the actual payroll you incurred that year. So, the last thing you want to do is have that payroll number inflated by a subcontractor that you hired to help you out with a job that was a little bit outside of your specialty.

Let’s take an example. Let’s say you are a carpenter. You are hired to handle a kitchen remodeling job for one of your clients. In the process there is some minor plumbing work to be done and to help out your client, you find the plumber and just sub the work to him and you bill your client for his services. That’s all good business but you must remember to get that certificate of insurance from you plumber before he sets foot on your job site. Why? Two reasons really.

First of all, that certificate of insurance will tell your insurance company that your subcontractor (in this case the plumber) did have insurance so the cost of the plumbing work won’t be added to your total payroll at audit time. This will save you a lot of money in insurance premiums.

Secondly, you can take a moment to make sure that this plumber has the correct coverages with high enough limits to protect you. Look at the certificate carefully and make sure that your subcontractors are carrying limits at least as high as yours. Next, make sure that the certificate is showing both workers compensation and general liability insurance coverage. If not, you will be on the hook for the premiums for the missing insurance policies for your sub contractor. Last of all, take a moment to make sure that there are no exclusions or policy coverage limitations spelled out in the certificate. If your subcontractor has an excluded coverage and your policy covers it, you might find yourself on the hook for extra premium at audit time.

Many contractors remember to ask for certificates from the other contractors working on their job site. But a large number don’t take the time to read the certificate and check to make sure that it meets all the criteria they need to protect themselves from an extra premium at audit or a large loss charged to their own policy. If you are a small contractor and would like help understanding your insurance certificate or your insurance coverage, be sure that you are dealing with an agent who specializes in contractors liability and workers compensation insurance policies. At Clinard Insurance Group in Winston Salem, NC, we insure many, many artisan contractors all of North Carolina and we can help you understand how to set up your policy correctly and keep your insurance audit premium surprises to a minimum. Feel free to call us for help, toll free at 877-687-7557 or visit us on the web at http://www.clinardinsurance.com/.

The source material for this article was pulled from http://www.insuranceanswerguy.com/.

What Would You Do With An Extra $343 In Your Pocket?

Our research indicates that on average we save our new clients $343 on each policy that that bring to us when they switch from their current insurance company. We specialize in helping people with their home insurance and their car insurance of course, but we also help small contractors and small businesses with their general liability and workers compensation insurance as well as helping automotive repair shops and used car dealers with their garage insurance. So we got to thinking. What will all of these clients of our do with the $343 that they each saved?

Here are a few ideas. Let’s say you are a gadget person. You could get yourself a new iphone and still have about $40 left over for dinner. Of course you would use one of those tricky new iphone apps to pick out the restaurant you want to visit. Already have an iphone? Well besides oozing with cachet, you could now purchase about 150 or so cool apps for your phone.

Not into electronic gadgets? I know, you can visit your nearby retail clothing store and pick out 4 or 5 tops and 4 or 5 cool pants or skirts to go with them. And still have a little money in your pocket to share with those pesky teenagers of yours.

Are you a golfer? Well if so, you could purchase 11 dozen Calloway golf balls with your personal name engraved on each one. I’m a terrible golfer and lose balls on every outing but that would last someone like me a couple of years! And hey, if you do play golf, don’t forget to up your liability on your homeowners policy in case one of those golf balls hits someone as it careens out of bounds.

At Clinard Insurance Group in Winston Salem, NC, we work hard to provide all of our clients with the very best insurance coverage at rates that give them a chance to spend some money on things that they enjoy. We know paying for insurance is unpleasant and we want to do our best to make sure that you have the protection you want and need without overpaying for it. If you would like top notch, professional advice with no fee at all, give us a call at 888-787-6557 or visit us online at www.clinardinsurance.com.

The source information for this article was pulled from www.insuranceanswerguy.com.

What Happened to the Grace Period On My Insurance Policy?

Over the years at Clinard Insurance Group, helping people with their insurance needs, I have heard this question many times. It doesn’t matter if they are talking about auto insurance, home insurance, general liability insurance or workers compensation insurance, people still assume that there is some magical grace period that allows them to pay their insurance payment after the due date. I’m not sure exactly where the terminology comes from but I think I have an idea where the concept arose.

In NC, if you don’t pay your insurance policy when it is due, then the insurance company cannot just cancel your policy that day. The law requires that they give you a legal notice of cancellation. The time frame for this notice varies by policy type but it is generally around 15 days. So, if your policy is due on the 5th of the month and you don’t pay the bill on time, then somewhere around the 10th of the month or so, the insurance company will send out a notice of cancellation on your policy. This notifies you that if your money is not received by a certain date (here is the legal notice time frame), then your coverage under that policy will cease.

I think this notice period is what has led some people to believe that there is a “grace period” which allows them to pay their premiums after the due date. But paying late and relying on this legal notice time frame is a dangerous practice for several reasons.

First of all, the insurance company doesn’t have to accept your money after the due date and they can let the cancellation stand. If you have had a loss during this time, you might not even be protected since in some cases (particularly on policy renewal dates) the notice of cancellation states that the effective date for when protection ends is the same as the original payment due date.

Secondly, there is a growing trend among insurance companies to charge hefty fees for payments that are late. Some companies charge as much as $35 to reinstate your policy after a cancellation notice has been issued. These changes tell me that the insurance industry has decided that as times are hard and people are letting some bills slip a bit, they want to be first in line. So if you are having some cash flow issues and think you might want to pay your insurance bill a little late, be sure that you understand all of the late penalties and fees that will apply. You might choose to prioritize the insurance bill closer to the top of the pile.

There is a sure fire solution to prevent a late payment on your insurance policy and thus prevent lapses in protection and costly late fees. Most all insurance companies can now take your payment on a monthly bank draft. This means that they will draft the money from your checking or savings account on the due date automatically. Of course this will fail if there is not enough money in the account to pay the bill, but for protection from forgetting or misplacing an insurance bill, this one could save you a lot of money. At Clinard Insurance Group in Winston Salem, NC we try and make this option available to any an all of our clients who might be interested. If you would like to know more about the specific fees your company charges for late payments, or if you would like to have your policy set up on bank draft, please call our office at 877-687-7557 or visit us on the web at www.clinardinsurance.com.

The source information for this article was drawn from www.insuranceguy.com.

The General Liability and Workers Compensation Insurance Policy Audit Trap – A Cash Flow Disaster

If you are business owner or the manager of a business, then you probably have some working knowledge about general liability insurance and workers compensation insurance. At Clinard Insurance Group in Winston Salem, NC, we specialize in insuring contractors and other small businesses who need these types of policies. And we have found time and again how many small businesses are seduced into the cash flow nightmare I call “the audit trap”.

For most contractors, their general liability and workers compensation insurance policies are rated based on payroll, and in some cases gross receipts as well. Since the exact amount of payroll or receipts is unknown to the insurance company when the policy is first written, the policy holder has to give the insurance company an estimate of the total payroll for the coming policy year. Many contractors and small businesses are tempted to “low ball” this estimate to reduce the total premium on their policy. While this strategy can work well if the company plans ahead for it, just shooting in the dark with low estimates can create a cash flow disaster.

Here’s why. Let’s say your actual payroll on for your company is $500,000 per year. And let’s also assume your general liability rate is $5 per $1000 of payroll. This means your policy costs would be $2500. Now let’s assume you start your policy with a low ball estimate of $250,000. This means your new policy is issued at a cost of $1250 instead of $2500. Looks pretty good so far. But now jump ahead 15 months and the insurance company has now performed an audit of your payroll and found that your actual payroll during that policy term was $500,000. So they send you a bill for the additional premium due of $1250. Now that wasn’t really unexpected, but if you didn’t budget for this, it could put a crimp in your cash flow. But here’s the kicker. The insurance company will now increase the payroll on your renewal policy and send you another bill for $1250 due right away. Suddenly you have to come up with $2500 to square yourself with the insurance company. And that can make for a real cash flow problem.

Again, if you plan for the audit and reserve funds to make the payment then you can gain a cash flow “float” advantage by low balling your payroll and gross receipts estimates. But more often than not, the business owner fails to implement a plan to reserve these funds and instead faces a cash flow crunch at audit time.

At Clinard Insurance Group in Winston Salem, NC, we specialize in insuring small contractors located all over the state of NC. If you would like help with your general liability or workers compensation policy, please give us a call, toll free at 877-687-7557 or visit us on the web at http://www.clinardinsurance.com/.

Source material for this article was taken from the site: http://www.insuranceanswerguy.com/.