Carrying workers comp for construction is necessary to protect your employees and your business in the event of an accident. Here’s how you can finally get out of State Fund and lower your premiums at the same time.
Going without workers comp for construction should never be an option. Think about the dangers your employees face each day on the job. There’s a reason why hardhats and protective gear are a must.
However, buying the right insurance plan isn’t always a cut and dry decision. You need great coverage at an affordable price, and Coastal Work Comp Brokers can help you get just that.
How Much Is Workers Comp Insurance for Construction?
Many employers learn the hard way that workers comp rates for construction are expensive. Why is that exactly? In the eyes of an insurer, the construction industry is high-risk. There is a higher probability of workers sustaining an injury while on the clock. And the riskier the business, the higher the premium.
The National Council on Compensation Insurance (NCCI) assigns a class code to each industry for workers’ comp insurance. Industries with the highest codes end up paying more in premiums just because the NCCI deems them riskier. For instance, the NCCI labels bridge construction jobs with a class code of 5211.
Where Can Construction Companies Get Workers’ Comp Insurance?
Even though you’ll pay extra to cover your workers, you don’t want to head out into the field without adequate coverage. Most business owners find it relatively easy to purchase a workers’ comp plan from a private insurer. However, many private entities choose not to cover high-risk industries, and they could deny your application.
You can also purchase workers compensation insurance from the State Fund. This program uses allotted government funds to help high-risk industries get the coverage they need.
While this may sound great, the policies aren’t competitive. Most companies that end up with state-funded plans end up paying hefty premiums.
Coastal Work Comp Brokers believes every high-risk business should be able to buy affordable coverage for their workers. That’s why we offer many options to fit the needs of your business.
We may be the right choice if you:
- Employ 5-500 construction workers
- Are tired of paying expensive premiums
- Want to find an alternative to State Fund coverage
- Work in a high-risk industry, including construction
- Lost coverage through your current carrier
- Have any gaps in your coverage
- Experienced higher than expected losses
- Have a higher than ideal experience modification rating
- Can’t afford a large deposit
- Are tired of annual audits
- Want to lower your risk of getting sued
At Coastal Work Comp Brokers, our brokers will help you choose a policy that provides you with enough protection without breaking the bank. It’s our mission to make sure every construction company gets the coverage they need.
How Is Workers Compensation Calculated?
Insurance companies use a simple mathematical formula to determine your premiums. And the overall risk of a business plays a significant role in how much you’ll pay.
Here are the numbers an insurer will run through the calculator: Employee Payroll + Class Code + Experience Mod Rating = Premium.
Working in the construction industry means you’ll pay a higher workers’ compensation premium than someone in a safer sector. However, coverage is essential. Having workers’ comp ensures your company won’t go bankrupt after an accident. It will also open doors for potential work and help you recruit the best talent.
Does a General Contractor Need Workers Comp?
Most general contractors oversee construction projects, and they even help hire additional workers. It’s crucial to make sure your general contractor has enough workers’ comp insurance to protect them. Besides, the majority of states require coverage, and it’s difficult to find clients without insurance.
Do 1099 Employees Get Workers Comp?
The government does not view independent contractors as employees. Because of this, 1099 workers are not eligible for coverage under a traditional policy. However, many companies mislabel their self-employed workers, which can open up a costly can of worms if someone gets hurt on the job.
To protect your livelihood, make sure every independent contractor carries liability insurance. If they don’t, they may sue you for damages if they sustain an injury.
Who Is Exempt from Workers Compensation?
Some construction business owners may qualify for a workers’ compensation exemption. If you operate as a sole proprietorship or don’t hire employees, you may be exempt. However, the rules vary from state-to-state. And if you contract workers in multiple states, the exemption process may change.
But, just because you can apply for an exemption doesn’t mean you should. Most customers won’t hire construction companies who can’t provide a copy of their current insurance policy. And if you ever get sued by a contractor, you could lose everything.
What Happens If You Ignore a Workers Comp Audit?
Before renewing your workers’ comp policy, most insurance companies will perform an audit. They do this to verify your payroll, class code rating, and sub-contractor usage. Depending on the results, you may end up owing more money.
Although you may want to skip it, ignoring an audit is not a smart plan. If you do, the insurer will cancel your policy or mark you for non-renewal. Having a non-renewal on record will make it more difficult to obtain coverage in the future. They may also take legal action against you for violating your contract.
How Much Workers’ Comp Insurance Do I Need?
Every construction company operates differently. It’s no wonder why the cost of coverage varies so much.
The amount of workers’ comp insurance you need will depend on the following factors:
- The number of construction workers you employ.
- The age of your workforce.
- Any on-the-job risks related to your type of work.
- The financial risks of your region, including average medical costs.
Coastal Work Comp Brokers wants to help you take the guesswork out of buying the right coverage. Even if you work in a high-risk industry or have a high modification rating, we have a plan for you.
We also specialize in coverage gaps, multi-state risks, and new ventures. Best of all, we offer pay-as-you-go plans to help you avoid that pesky annual audit.
When you choose Coastal Work Comp Brokers, you can rest assured we’ll make sure you get the right amount of coverage for the best price possible.
We can help you save 30-40% off your premiums! Our team will even provide risk/claims management and human resources at no extra cost to you.
Call 323-543-4141 for expert help in finding the best workers comp for construction coverage.