Todays topic for discussion, workers’ compensation insurance, or work comp, workman’s comp, call it what you want, but workers’ compensation is what you need for your business to operate in the state of New York, and it comes with potential pitfalls.
So today just some haphazard common errors that we see in workers’ compensation policies that we review for potential customers. Often they have the classification of the business incorrect. Actually I had a chemical distributor, a distributor to chemicals, in the capital district and their business was classified as a law firm. No joke. They had a warehouse. They had a warehouse man. They had a forklift and they sold chemicals, non-toxic chemicals, but they sold chemicals. They were not a law firm. They had three names in their name, just like Hopmeier Evans & Gage. We’re not a law firm. We’re an insurance office. So classification is the biggest error, and that was actually the people that made the error was the payroll company that sells work comp along with your payroll. Some people buy it. Sometimes we refer them to the payroll company if it makes sense.
However, often they compete solely on price. Somebody slides it into the wrong classification and roofers do not pay the same classification as office workers for workers’ compensation. That all comes out in audit time or claim time or both. The business owner is stuck with one big bill and an explanation to make sure that they know he wasn’t or she wasn’t manipulating the system. It was the payroll company salesperson that manipulated the system. A huge problem.
Number two would be estimated payroll and classifications. Sure, we can make anything look inexpensive or less than your current policy and how brokers or agents do that sometimes is they change the estimated payment or they change the estimated comp mod, the modification factor that’s applied if you have claims. You need a reputable broker, somebody who is going to educate you, somebody who is going to talk to you and explain what’s going on.
e are here to help. (518) 377-7414, and we can also even talk to you about how to handle that audit that you have or how to do a pre-audit, which we suggest for our clients to get everything in order so the audit runs nice and smooth in and out. Oh, one final thought for those that have your work comp through payroll companies. No, they charge you a fee. They charge you two fees actually, one to do your payroll and one to do your insurance, and then they get a commission on your insurance as well. So be cautious of that. A lot of people don’t realize that we can help you out. We can help you understand that. Just give us a call, (518) 377-7414.