Employee taking inventory

Tips to Help Avoid Unexpected Workers’ Compensation Premium Costs and Changes to Coverage

At the end of every workers’ compensation policy term, an insurance carrier will conduct a final premium audit. The audit is based on the policy’s Named Insureds and the actual payroll, operations and job classifications for the expired coverage period.

During the policy year, small businesses may experience changes in staff, operations and perhaps even leadership. It is important for small business owners to communicate those changes to their agent and workers’ compensation insurance carrier as they occur.

There are several common changes small businesses can make that can cause an increase or decrease in the final premium. Here are a few of the most common changes:

While certain changes such as those listed above can impact workers’ compensation premiums, other changes such a change in ownership may actually impact the continuation of coverage:

When it comes to avoiding surprises with insurance coverage and premiums, much of the responsibility is on the policyholders. Small business owners should report changes in payroll, locations and operations to their agent and insurer as the changes occur.

To be proactive, regularly speak with your agent regarding your workers compensation exposures and coverage throughout the year.

The information provided is intended to provide a general overview. This information is not legal advice and should not be relied on as such. EMPLOYERS makes no warranties for the accuracy, adequacy, or completeness of the information provided, and will not be responsible for any actions taken based on the information contained herein. If you have legal questions or need legal advice, please consult an attorney.