In the past I have spoken to clients who were under the impression that workers comp insurance rates were set in stone by the State and so, therefore, there would be no reason to shop around for better rates. Although there are recommended rates for each class of business there is no one set price. Rates can vary from one carrier to another. Considering the rising cost of California Workers Comp insurance it is definitely a wise decision to shop rates and make sure you are not overpaying. Here is a list of what you will need to shop your Workers Comp rates:
1. You will need your FEIN #. Carriers do not want to present duplicate quotes to the same business so they keep track of whether they have already quoted you by your tax identification number.
2. If you are currently insured you will need to present proof of your prior claims history. In the world of Workers Comp this proof is known as your “loss runs.” You can request loss runs from your current Broker, or, if you do not wish to make him or her aware that you are shopping elsewhere you can request them directly from the carrier. Allow a good few days and perhaps even up to a week to receive your loss runs. All insurance carriers are required by law to provide you with these.
3. If you’ve had a loss be prepared to explain what occurred in detail. Tip: if you have taken any measures to prevent further losses be sure to mention that to the Broker as insurance carriers love to hear that and will look more favorably at quoting your insurance.
4. Be prepared to describe the details of your business operations and what duties your workers perform.
5. Be prepared to have an estimate of what you think your annual payroll will be for the coming year. Once you have that figure break it down by what you estimate the payroll to be for your different classes of employees. In many industries if your clerical employees are physically separated from the main class of employees you can classify them separately on your workers comp and pay a lower rate for them. So, if you have an auto body shop that does some auto repair work and you have one full time clerical worker you will want to come up with an annual payroll figure for your Auto Body Techs, for your Auto Repair Mechanics and for you Clerical workers.
6. Each class of employee is given a workers comp code. Your Broker should provide that information, but if you would like to be more hands on you can research the classification codes on your own on the Workers Compensation Insurance Rating Bureau’s website. Here is the link where you would go to research classifications: http://www.wcirb.com/class-search
Here are some common workers comp classification codes:
7219 truck drivers
8324 gas station
8387 car detailer
8388 tire installers at a tire shop
8389 auto repair (includes RV, Trailer, and Forklift Repair)
8393 auto body
8400 motorcycle repair
9079 restaurant workers (includes all food preparers, even on-site catering)
9008 commercial janitorial, power washing, window washing, parking lot sweeping
9096 residential cleaning
We at Sparrow General Insurance Agency are always happy to put together a free, no-obligation price quote for your business’s workers comp insurance. Please contact us today at (310) 379-0605.