See What is Contributing to The Improvements in The Indiana Workers Compensation System
Workers Compensation Rates in the state of Indiana are declining in 2019. The amount they are declining is by an average of 7.6 percent. The Indiana Department of Insurance approved the rate decrease in October. The savings amount to a total of more than $60 million for the business community in Indiana. This marks multiple years of declining workers compensation rates which makes Indiana one of the cheapest states in the country for businesses to buy Workers Compensation Insurance. In fact, as of 2017 workers comp rates in Indiana were 43% cheaper than the national average. Many small business owners still pay far too much for coverage by not taking advantage of all the credits and discounts available to them through partnering with an independent insurance agent.
Why are Indiana Workers Compensation Rates Declining?
Indiana Workers Compensation Rates in 2019 are decreasing because a number of reasons. The highest contributor to the declining rates is the lowering frequency of insurance claims. Because of these decrease in the frequency of claims, the insurance carriers do not have to pay out as much for those claims. These savings allow insurance carriers to pass on some of those savings to their customers, the business community in Indiana.
Additionally, the department of insurance credited a robust job market for declining rates. this is because as the economy strengthens more people create businesses which in turn creates a larger pool for insurers to collect premium. Not all businesses will receive the same decline in rates. Some businesses we see a more significant decline while some businesses may see little to no decline in premium. This is attributed to a number of factors including industry, payroll, and claims history.
How is the Indiana Workers Compensation System Unique?
The Indiana Workers Compensation System has some aspects of it that are unique from other states. Like most states, in Indiana employers are required to purchase workers compensation coverage if they employ one or more workers. Most states are NCCI States, meaning they use the National Council for Compensation Insurance to determine rates on premium for the various classification codes throughout the state. Indiana does not primarily use NCCI. The state uses the Indiana Compensation Rating Bureau as the assigned risk provider and to establish pure premium rates. The ICRB does partner with NCCI for some of the workers compensation system functions including ratemaking and for using the NCCI basic manual. The ICRB does not use all NCCI Class Codes. As a business owner, it is important to always confirm your classification codes with the ICRB.
What Can Indiana Business Owners Do To Amplify Workers Compensation Savings?
Understand The Businesses Experience Modification Rating
Understanding a businesses experience modification rating is one of the single most impactful things a business owner can do to positively effect what the business pays for workers compensation rates. This rating is the main factor underwriters used to determine if they are going to offer a business coverage and if so, how much they are going to charge for it. Knowing what goes in to this rating and taking adequate steps to keep it low will have a lasting impact on what a business pays for workers compensation insurance coverage.
Bundle all Policies
Bundling all of a businesses insurance policies into one package of policies is a great way to save on premium. Most businesses near more coverage than just the legally required minimum coverages of Workers Compensation and General Liability. Most carriers have packages offered in a Business Owners Package (BOP) and Commercial Policy Package (CPP) that are designed specifically for businesses within a particular industry. Bundling multiple policies together with one carrier typically saves you on premium and prevents gaps in coverage. A gap is when a business has two policies that they think cover a claim, but each policy has an exclusion for a particular claim. This commonly occurs when a business purchases multiple policies from multiple carriers.
Pay Premium in Full
If your business has cash on hand and has the ability to pay the full amount of yearly premium, it is in your best interest to do so. The insurance carrier will typically give a business a discount if they are able to pull their premium in full.
Make your Workplace Ergonomically Friendly
Another way to help control what your business pays for workers compensation premium is to ensure every employee has a workstation that is ergonomically friendly. This may cause customization based upon each individual employee, but focusing on an ergonomically friendly work space on the front end can save the business enormously on insurance claims from repetitive motion issues like carpal tunnel syndrome.
Monitor Employee Morale
Keeping a tab on the morale of your workforce is a good way to prevent accidents from occurring. Happy employees are healthy employees and healthy employees create less insurance claims. Taking additional steps to be proactive about employee morale can help a business deal with employee morale before it becomes a much bigger problem.