Business Insurance
Workers Compensation
Chapter Six
Every business is aware of the amount they pay for workers compensation insurance. When employers hire employees, they assume many responsibilities. Among the most expensive are the legal obligations under workers compensation laws for occupational disability due to work injuries or related diseases. Our country has put the solution to this financial burden on workers compensation insurance contracts purchased from private insurers.
Originally,
injury and disease that were thought to be work related came under common law liability. Under the
contributory negligence rule, the employee had to show that he or she did not
contribute to the negligence causing the disability. The employers
defense against such claims was referred to as the assumption-of-risk
rule. Even though the liability acts were designed to improve
the position of employees, the liability acts were not necessarily satisfactory
to all who used them. In fact, employees were often unhappy with how they
were treated and reimbursed when an injury or disease resulted from
working. Today workers compensation laws have superseded employers
liability acts in all jurisdictions in the
The theory behind workers compensation legislation completely disregards the old idea of liability based upon negligence. Instead, it states that the cost of occupational disabilities is to be paid by the employer, regardless of liability. The costs of doing this are passed on to the consumer as part of the cost of production of goods or services.
Compensation laws make the employer responsible for indemnity to the disabled employee without regard to the matter of fault or negligence. This means that even if the employee directly caused their work-site disability through negligence on his or her part, the employer must still compensate them. The amount of indemnity to apply in particular cases is predetermined by the law, although it does not equal the full income that was received while employed. If injuries are fatal, death benefits are provided for the employees dependents. Medical expenses, income, and rehabilitation benefits are also included.
Obviously, employers want to reduce the amount of workers compensation they pay if possible. One way to reduce workers compensation costs is to purchase policies called participating policies. These have the possibility of returning dividends to the employer if the loss experience is favorable (employees do not file claims for injury or illness). The lower the losses, the higher the dividend the employer can receive. Dividends are technically defined as refunds of overpaid premiums due to a favorable loss history, but they come in the form of checks that the employer can take to the bank. All workers compensation policyholders should strive to make sure their policy has the potential to return dividends, regardless of the size of the premiums.
Which employers should pay special attention to receiving dividends? Potentially any employer might want to investigate this, but those paying less than $10,000 annually might find the time working on it will not pay off, while those paying over $10,000 annually are more likely to find it worthwhile to put the time in. Many employers seek out a group plan that they qualify for. Often a group plan is the only way an employer can be eligible for dividends. A group plan is one that pools a group of smaller buyers, collects all the premiums and loss experiences, and then evenly distributes the dividends to the group members. Where can such plans be located? They are not always easy to find, but often they may be obtained through trade associations, or through insurance brokers and agents. They are sometimes referred to as safety groups.
Workers compensation plans pay the benefits for covered employees mandated by state law for job-related illnesses, injuries, and deaths. Benefits include medical expenses, death benefits, lost wages, and vocational rehabilitation. Failure on the part of a company to carry workers compensation insurance leaves the employer out of compliance with the law, and vulnerable to paying any benefits that would have qualified out-of-pocket, in addition to fines levied by the state. Each state may have variations on workers compensation laws so it is wise to check with the employers state for details.
The marketplace for workers compensation can vary greatly, depending upon several things including the state of domicile. In some states, only the state is allowed to sell workers compensation insurance. When that is the case, these states are referred to as monopolistic fund states. In some states, private insurers compete with state workers compensation insurance providers. In other states, only private insurers sell coverage, with no state participation at all. In these states, when private insurers refuse to insure a business, the business can purchase coverage from government-mandated assigned-risk plans. They may also be called pools. Private insurers must participate in the pool in proportion to the amount of business they write in the state.
An agent interested in dealing with workers compensation plans must first find out how his or her state handles this type of insurance. Obviously, if the agent resides in a state that is monopolistic it would not be possible to do so, since only the state would be able to issue this type of coverage.
Calculating Workers Compensation Premiums
The type of work the employer performs determines workers compensation costs. Some types of work are more dangerous than others, so it is reasonable that some types of business entities would pay more than others. Hundreds of occupations are classified by the workers compensation rating bureaus. When a class does not exist for a specific type of employees, they are then grouped in the class that most nearly fits the type of work they perform. A rate is established for each occupational class by studying the loss history for that specific type of work. These rates are then used by the insurers to calculate the amount of premium that should be paid by employers.
The annual premium is calculated by multiplying the defined rate by the number of hundreds of dollars of remuneration usually payroll paid annually to each employee in a given class.[1] Because different occupations involve different levels of risk for injury or illness, class rates can vary greatly. A construction company, for example, would be rated differently for a roofer than they would for their office receptionist.
Applying Payroll Classifications Properly
An employers classification for workers compensation must be correctly established. An error could cause the company to pay too little or too much. Failure to get the employees payroll properly classified may even ruin the business in some situations, if an audit was performed. If the insurer ran an audit and discovered errors in classifications, it would adjust the premium and retroactively collect for the past three years. While overpayment would not have an adverse effect during an audit, obviously underpayment could. Employers should keep an exact detailed report of their employees, itemizing each persons job title and job description. When purchasing workers compensation insurance it may be necessary to go into further detail to make sure the agent or broker fully understands classifications.
To prevent a reclassification nightmare, the employer will not accept an agents or anyone elses estimate of classification for purposes of workers compensation. Either the owner him or herself, or a person assigned to the task will document important personnel changes and the reasoning behind the changes that might affect classification. Except for court appeals, the states workers compensation insurance rating bureau has the ultimate authority for classification assignments. Insurers will accept their classification of job titles. While companies do not normally invite the rating bureau in to look at how their employees are classified (who wants to risk a raise in rates?) if the employer feels they are paying a much higher rate than warranted there may be nothing to lose by doing so.
Experience Modification Factors
Standard workers compensation rates are published by the insurance rating bureaus and are usually referred to as the manual rates. It is these manual rates, based on job classifications, which establish the rate the employer will pay for workers compensation. The rate is considered to be an average risk rate, to which each business in the same category is compared. The experience modification factor is a multiplier applied to standard workers compensation rates, serving to either discount or surcharge the premium for individual companies. The calculation is based on the history of losses for each company versus premium size, as it attempts to measure whether the company falls in the average risk range stated in the manual rates or if it is above or below average in their losses.
Considering the fact that the rate paid for workers compensation can be average, below average or above average, it is reasonable for a business to expect their employees to follow safety rules and avoid injury. Any company subject to a higher rate will certainly want to minimize higher modifications to reduce premiums.
The experience modification factor is calculated once each year, which then locks in the workers compensation insurance premium for the full year. The anniversary date (which may be stated as the expiration date) used for the modification rate, is the same each year. The calculation period may begin six months prior to the actual anniversary date, however, since it can take some time for the process. It is important for the employer to know when the modification ritual begins since he or she may wish to influence the experience modification factor in order to reduce the workers compensation premium cost for the coming year.
As one would expect, the calculation will take into account the loss history of the business. Typically, they look at the past three years of loss history, skipping the most recent 18 months. Recent claims have not had time to clearly establish the amount of loss and they want the classification to be accurate. In other words, if a business has a loss today, it will not impact the workers compensation rate for at least 18 months. On the positive side, this allows the business to take corrective measures to prevent a second loss of the same type.
Minimizing Experience Modification
There are steps that a business owner can take to minimize their experience modification factor. Depending upon the size of the premium paid, it is important to receive loss runs regularly, either on a monthly, quarterly, semiannual, or annual basis. The employer should obtain all his or her loss runs for the previous five years. The reports display losses incurred, including dates, category of loss, cause of loss, and amounts paid or reserved. These reports would be reviewed for:
Claims that do not belong to the business assigned. Insurers do make mistakes and someone elses loss assigned to the wrong business will unfairly drive up costs.
Claims that do not make sense as they relate to the way the owner understands the claim to exist. This might be a mistake in how it was entered (adding too many zeros, for example). Look for numbers that may be transposed as well.
Claims that were closed but are not showing closed. If an employee has come back to work following an injury, the case should be listed as closed. If it is not, the employer needs to investigate to find out why. It might be something as simple as a needed signature.
By checking the values used each year to establish the modification factor for workers compensation the business owner can prevent any over-charges. If the business has an insurance agent or broker that is handling the workers compensation policy, the owner should contact him or her. The agent receives a commission and correcting errors is their responsibility. If the company is located in a state that does not have private insurers, the company owner will need to contact the state department that handles such matters.
Loss Control Services
If your state is one that uses private insurers, the agent will be expected to perform some loss control services. Such services are very valuable to the business owner. If correctly and continually provided, they help avoid claims and minimize the impact of claims when they do occur. Most loss control services deal with two areas: loss prevention and loss reduction. These services involve many things, including free publications, guidance, evaluation of current conditions, and problem solving. A good insurer can be a valuable source of information regarding the prevention of loss which directly affects the cost of workers compensation for the insured business.
No matter how much guidance an insurer provides, however, if the business is not receptive it will not lower their rates. The business must be willing to invest resources in loss control and prevention. A long-term commitment is necessary to accomplish lower losses and the resulting lower premium costs. For safety to be well established it must begin at the upper management level. Only if all employees know that management considers safety and loss prevention to be a priority will the company see a drop in workers compensation premium rates.
There is an aspect to workers compensation that is often not realized. Statistically, lower worker turnover produces lower loss rates. With this knowledge, good hiring practices must be established, assuming the industry is not a seasonal one, to reduce employee turnover. There is some evidence that a small percentage of people purposely seek employment to be able to receive workers compensation benefits. These people will be sure to have an accident no matter what the employer emphasizes in safety and use of good judgment. Having established employees will lessen the likelihood that a company will inadvertently hire the accident-prone employee.
Reviewing an experience modification factor is not something that is done once. It must be reviewed annually. The employer must obtain a copy of his or her current experience modification worksheet (this is where the coming years factor is calculated). The worksheet will show the employer when the calculation was made so that the businessman or woman can mark it on their calendar for the next anniversary (as a reminder of when it comes due). At least ninety days prior to that anniversary date, the business owner should begin a claims status review, looking for errors or anything that can reduce the company rate.
A standard business letter can be used to obtain policy history. Direct it to the current agency or state department. The letter might state something like: We are reviewing our business policy history for the past five years. Please help us by indicating which policies you provided during that period. It will be necessary to provide all policy information. It might be possible to order the information over the telephone, but by putting it in writing there will be a paper trail in case there are problems receiving the information.
A letter will also be necessary prior to the next experience modification calculation date. Six to four months prior to the policy anniversary date request a workers compensation open claim status reports request. The letter might state:
Dear Mr. [agent]
or Dear Workers Compensation State Dept.:
Our records indicate our new experience modification factor should be calculated in the month of _____. We want to make sure the claims reported on the Insurance Companys Unit Statistical Reports are correct so our resulting modification factor will be as low as possible. To accomplish this, please help us by sending a status report for the three years that will affect our upcoming modification calculation. We wish to conduct a review of all open claims with you to close any necessary claims and correct any errors that might exist.
We appreciate your help in this matter. Thank you for working with us towards improving our modification factor.
Of course you will want to sign and date the letter and keep a copy to develop a paper trail if there is any difficulty in obtaining this information.
Companies and state agencies are now in the technology age and should have the information available in a computerized format. Some will automatically send each company a notification of any changes, but not necessarily all of them. It should not be assumed that this would happen. Completing this investigative work does not guarantee reduction of rates. A high modification factor will only be altered if a mathematical error is found in the Unit Statistical Report (the report of premiums and loss data, including reserves, provided to the rating bureaus). Also remember that the most recent 18 months will not be part of the current report. Even so, if an error exists in that 18 months it is still important to get it corrected for future ratings.
Dividend Programs
Dividend programs are not available in all states, but where they are available, employers should take advantage of them. When an employer purchases a workers compensation policy, he or she should ask for a written explanation of the potential to receive dividends. If the employer makes this a habit, it will help prevent unknowingly buying a nonparticipating policy, the kind that never pays a dividend. Only a participating policy will have the ability to pay the employer a dividend. How the dividend works should be fully explained and understood by the insured. There is usually what is called a dividend disclosure statement presented by the selling agent or broker.
Communication is always important when it comes to insurance, but for the agent selling business products it becomes crucial. The decisions made regarding business insurance have a huge financial impact.
The agent will want to fully cover all aspects of workers compensation policies, beginning with an understanding of the concept of safety group programs. These pool similar groups of policyholders into a common dividend program. For businesses paying under $10,000 per year in workers compensation premiums, this can especially be an advantage.
Next, it is important to understand the concept of individual dividend plans. These tend to be attractive to those companies paying more than $10,000 annually in premium if they have good loss experience.
There are variances among workers compensation plans so this is not an overnight learning experience. It can take a long time for the business owner to fully understand all aspects of workers compensation policies and how to best utilize them. Even when dividends are available, they may not be paid for six to eighteen months later, allowing time for claims to mature. Dividends are never guaranteed and only a very foolish agent would make such a promise. In fact, it is against the law for an insurer or agent to make any promises of a dividend.
Dividend Types
A common dividend program is called the safety group program, which is usually best for smaller, homogeneous accounts. In this case the policy is placed with a group of similar businesses, and the loss experience of the entire group dictates the percentage of each members premium that would be paid as a dividend. The business owner may receive a dividend (there are never any guarantees) if his or her group performs profitably. This could be true even if that specific business had a loss since the dividend depends upon the loss performance of the group not individual companies within the group. This is a major advantage of pooling losses within a group.
Each business must determine whether a group program or an individual program is best. When a pooled group is the most desirable choice, it is important to select a group based upon its dividend history. Many professionals suggest obtaining an individual dividend history of the groups available to the company. With prior knowledge of the potential dividends and the timing of the possible dividend distributions, while still not guaranteed, the company can make an informed choice.
While a pooled group has advantages for some companies it does not necessarily mean it the best choice for every business. Proposals that illustrate individual dividend plans (also called retention plans) are based on past history. Obviously, it would not be possible to show such plans based on the future. Therefore, past history and the losses that occurred are used to demonstrate the dividends that would have been received, using the estimated premium that would currently be paid, had a dividend plan been in effect.
A dividend formula is usually provided by the quoting insurance company since they are seeking the new business. The quoting insurer will disclose how the dividends are being calculated. Comparing individual dividend plans can seem complicated, but with a little practice it will become routine.
Comparing Dividend Proposals: Terminology
The first step in any type of industry is learning the terminology. It would be very difficult to compare any type of product if one did not understand the words being used. The following terms do not represent all that may be encountered.
Retention:
This is a value that represents the percentage of the companys premium the insurer will keep even if the business does not experience any losses. This should not be surprising since any type of industry must make a profit if they are to stay in business. Insurers are no different. They, too, must make a profit.
Loss Conversion Factor (LCF) and
Loss Development Factor (LDF):
These values are multiplied by the companys claims in dollar amounts in order to allow for potential increases due to losses that have not yet been settled.
Incurred But Not Reported (IBNR):
This is a percentage multiplied by the companys premium in order to take into consideration any claims that may have occurred, but have not yet been reported.
There may be other terms that the agent or client will need to learn, but these are the primary terms. Any terminology that seems vague or is not understood should be investigated. No agent should ever assume knowledge that does not actually exist. Therefore, no agent should ever guess when it comes to presenting insurance coverage. Even if it means another meeting at a later date with the client that is the path that should be taken.
When comparing dividend proposals, one of the first steps involves identifying the values for each of the previously listed terms. The Workers Compensation Coverage Checklist provides spaces where these values may be entered. That checklist will be included in this chapter. Some agents merely provide the client with this checklist, but generally it is more productive if the agent fills it in as part of their presentation.
Enter values on the form, then use some simple math to complete the proposal. The proposal with the lowest total of retention, plus IBNR, is probably the best choice for the business from a dividend standpoint.
Of course, dividends are not likely to be the only consideration for the company. The business owner should want to compare one, two, and three year plans. In fact, valid comparisons must take this into consideration in order to have correct decision-making information. The longer plans often have more favorable retention numbers, because they require a longer commitment. It is important to note that when an insured enters into a long-term commitment with their insurer they may lose future dividends if they change insurance companies before the end of the contract or plan.
A recapture clause means the insurer may reclaim the dividends already paid to the insured in the first payout if future calculations show losses larger than projected in previous calculations. As we have discussed, dividends are not immediately paid. Even with delayed payments, however, loss calculations can be incorrect. If the companys dividend proposal is for more than one calculation and payout, it is important to understand a recapture clause, if one exists in the contract. If it is possible to avoid a recapture clause, it may be best to do so. Most professionals feel proposals with such a provision are less desirable.
There is always the potential of losing dividends. Of course, any potential dividend would be lost if the policy lapsed for nonpayment of premiums. Any failure to keep the policy in force would forfeit a dividend payment. Additionally, if the company fails to respond to audit requests or pay required audit premiums this could result in a loss of dividends. It may make sense, in some cases, to borrow money in order to honor an agreement with the insurer, in order to preserve a dividend payment that would be received by the insured.
The actual timing of dividend payments varies greatly among insurers. The timing of dividend payments should be part of the proposal. If the agent fails to include it, the client will probably ask so it is best to just put it in the proposal to begin with. Some companies may have all dividends released 18 months after the policy expiration. Others may release half the dividend 12 months after the expiration with the other half coming 24 months following policy expiration. Since dividend payment can vary so greatly, comparing one insurer against another solely on this issue would not be productive. It is wiser to only compare on this issue when two proposals are very close and a deciding factor is needed.
Once an insurer is selected, however, the buyer may want to mark their calendar for the anticipated dividend payment date. Most insurers will mail the dividend checks to the agents office. The agents will then deliver the check to the appropriate party. This is also an excellent time to review policies or handle other types of insurance needs. Even the agent may want to mark the calendar for anticipated dividend checks to make sure they arrive. Checks can become lost in the mail or even stolen. In fact, some agencies, not recognizing the checks for what they are, have actually deposited them into their own accounts. This is not legal, but mistakes do happen. If an agent believes that a dividend check was not received, he or she should immediately contact the insurer and check on it. It will be necessary to have the applicable policy numbers and effective dates in order to check on the dividend issue.
LCF and LDF reduce dividend payment. The loss conversion factors (LCF), and loss development factors (LDF), are applied to magnify losses that the business experiences, which is why these two factors reduce dividend payment. The closer the numbers are to 1.0 the less they will reduce dividend payment. If there are no losses, neither factor will matter.
How do the LCF and LDF work? Its mathematical:
Suppose the insured has a $10,000 loss and the factors total 1.15. The insured would be charged $11,500 for the loss (10,000 X 1.15). The greater the loss amount, of course the higher the impact.
Dividend History Matters
While dividends may not be the most important factor when selecting an insurer, if dividends are available the agent may as well do his or her homework to get the best results for their clients. This can only help the agent in the long run. What is presented in the dividend proposal is not necessarily what will happen. One of the best ways to see the likelihood of dividend payment is by looking at the insurers history. The companys consistency in honoring dividend projections is a great indicator of future payments. Many industry professionals also feel dividend payment history is an indicator of the insurers strength. Obviously, a company with financial problems is much less likely to pay out dividends.
Again, it must be noted that it is illegal for an insurance company to guarantee the payment of dividends. Dividend proposals are only based upon historical payments and practices based on companies of the same size. It is because dividends are based upon a subjective evaluation process that they cannot be guaranteed. The insurers board of directors authorizes any dividends that are paid. Any dividends the business receives on their current policy will not actually be paid until a later date, usually one year or longer, allowing unsettled claims to be settled. Even when dividends may be due for an existing policy, if the insurance companys finances were to suffer they may not be paid. When an insured receives a reduced amount of their dividends, it is called factoring by the insurance industry.
Commissions
When an agent sells a product he or she earns a commission. There is nothing wrong with this; everyone deserves to receive a paycheck. When a workers compensation product is sold, the commission is usually a maximum of 10 percent (it may be less). When large companies have premiums over $50,000 annually it is not unusual, in those states that allow it, for the agent to reduce their commission to encourage the transaction. Some insurers will match the commission reduction, which lowers the retention and increases the potential for dividends to be paid.
Since some states control workers compensation insurance agents would not be involved with this type of product. States do not pay commissions. As a result it is not possible to manipulate dividends.
Good Accounting Is a Must
All workers compensation contracts can be audited. While such audits may be voluntary, they are not necessarily so. Usually the business will receive a notice by mail requesting a voluntary audit. An auditor may also make a physical visit, called a physical audit. A voluntary audit may be conducted annually in many states.
A voluntary audit requests the business owner to provide actual payroll information for the policy year, broken down by workers compensation classifications. In a physical audit the individual performing it will inspect records for the purpose of verifying the payroll and workers job classifications are correct. The auditor may inspect the companys payroll tax returns, financial reports, time cards, and certificates of insurance from subcontractors, if that applies. The records must agree so the auditor can satisfactorily reconcile with the payroll estimates on which the premiums were calculated.
One of the most important parts of record keeping, as it applies to workers compensation, is the time cards. Each day of work should show on the time card. If there are different employee classifications, this should be noted on the time cards. This is especially important if one employee holds more than one classification.
Other Considerations
Illegal Immigrants
Workers compensation coverage excludes illegal immigrants when their employer has knowledge of their illegal status. Of course, it is unlikely that your client will tell you they know they are hiring illegal individuals. However, the employer is now required by federal law to check the status of all their employees or potential employees. What does this mean for the business owner? If he or she knowingly hires an illegal immigrant and that person is injured on the job, the business owner is personally liable for any claims.
Owners and Officers
Should the owners of a company be insured under workers compensation? This can be a difficult decision. Usually, the business owners accountant should be consulted, since there can be tax issues involved. It will depend on the individual situation of each business and the desires of the owner. In some cases, they should be covered, especially if the type of business is such that injury or disease is a possibility for anyone associated with the company, including the business owner. Another reason it may be wise to include owners and officers has to do with their classification, which is often assigned to the low-cost clerical or sales class. If owners and officers simply want to be included, it is not usually a problem to do so.
Choosing to include owners and officers in their workers compensation coverage does not guarantee that the agent will be able to find an insurer willing to do so. It can be especially difficult if the owner is a sole proprietorship, partnership, or a closely held corporation with only one or two people owning all the stock. The reason: it can be difficult determining when the individual is at work and when he or she is not. Insurers know that small business owners are essentially on the clock 24 hours a day. The insurer only intends to provide coverage for an 8-hour workday, but the small business owner seldom limits his or her time to that. Since the coverage includes all medical expenses from work-related injuries and illness with no dollar limit, this is a high amount of risk for the insurer. Coverage for loss of wages is also included if disability occurs. If the owners have a good medical plan and disability insurance, workers compensation coverage may be redundant anyway.
Independent Contractors
Many companies have begun using independent contractors when possible for specific tasks. The owners feel they save in numerous ways when this is possible, but how does it affect workers compensation insurance? Numerous tests can be applied by a workers compensation rating bureau to determine whether someone is actually an employee or an independent contractor, so sometimes this avenue of employment can backfire on the business owner. It may be wise to consult the companys attorney and accountant to see if specific people come under the category of employee or independent contractor.
Volunteers
Most types of business owners would not have people volunteering at their workplace, but when this is a consideration the business owner must know their workers compensation responsibilities. It may be necessary to obtain an endorsement on the workers compensation policy to cover the volunteers. Anyone performing work related duties are usually considered employees, even if working without pay. The business owner is supposed to report an honest estimate of the payroll he or she would have paid for the equivalent work from a paid employee. The workers compensation insurer will charge a premium to cover the risk the volunteers bring to the company.
Out of Territory Employees
When a company purchases a workers compensation policy, there is a specified territory of coverage (usually defined by state). If an employee will be working outside of the territory, it is important that the owner immediately notify his or her agent or insurer. When there are employees working in other states (outside of the territory defined in the policy) an endorsement must be added to the policy, called an other states endorsement. If the employee is working in one of the monopolistic states, it is necessary to purchase coverage directly from that states workers compensation fund. An employee injured in a state outside of the employers territory is eligible to collect either the benefits of the state in which the injury happened or those of the state where the employer is domiciled (located). If the endorsement is not added or coverage is not purchased from a monopolistic states fund, the employer may find himself or herself responsible for paying the difference in benefit levels between the home state and the state in which the employee was injured.
What if the
employee is going to be working outside of the
Workers Compensation Coverage Checklist
It is important to have appropriate information when proposing an insurance plan. By using the workers compensation coverage checklist the agent and employer can make appropriate decisions.
1. Employers liability limit:
Bodily injury by accident each accident: $_____
Bodily injury by disease each employee: $_____
Bodily injury by disease policy limit: $_____
2. Owners and Officers that are covered / Estimated Premium for each
A. ____________________________ $_____
B. ____________________________ $_____
C. ____________________________ $_____
3. Participating Policy
Yes No
Dividend potential
Check one: One-year plan Two-year plan
Three-year plan Other
Safety group used (include dividend history)
Retention percentage: _____ Loss development factor: _____
Loss conversion factor: _____ Incurred but not reported factor:
Recapture provision: _________________________________
Dividend calculation dates: ____________________________
Payout Dates: ______________________________________
Payout Percentage: _____
4. Experience modification used: ____________________________
5. Estimated annual premium: $_____
6. Audit frequency: Monthly Quarterly Semiannual Annual
Billing frequency: Monthly Quarterly Semiannual Annual
Deposit premium: $_____
7. Yes No
Other states endorsement
Jones Act coverage provided on if any basis (Also covers those who work on or near waterways, boats, ships, docks or wharves)
Voluntary labor coverage
8. Yes No
Retrospectively rated plan
Basic premium: $_____ Minimum premium: $_____
Maximum premium: $_____ Stop loss: $_____
This worksheet is a basic one to be used for workers compensation quotes. Agents may want to individualize one for themselves.
Thank you,
United Insurance Educators, Inc.
End of Chapter Six