Employers in Nevada are fortunate to have workers compensation rates that are among the lowest in the country, especially compared to California and other western states. Nevada also has a vibrant workers compensation market with dozens of large insurance carriers competing for business. Despite this, workers compensation is often one of the most expensive and least understood types of insurance that business owners must purchase. The way that workers compensation is rated seems confusing, on the surface, but the reality is just the opposite.
Workers compensation policies classify employees based on job duties. A percentage rate is assigned to each classification code based on expected and historical loss data. That percentage rate is then multiplied by the total payroll for each employee classification. A typical workers compensation rating page will look something like this:
|8803||Auditor or Accountant||.23||$75,000||$173.00|
Again, the rate is multiplied by the premium basis (total payroll) which equal the final premium by classification code. In addition to the premium by class code, the workers compensation policy will have several additional charges and fees.
The first charge that may be shown will be “increased limits part two” and will be either a flat premium charge, or show a percentage. This charge only applies if the policy has increased Employers Liability coverage (aka part II coverage).
The policy will usually have an “expense constant” charge of between $150 and $290, depending on the insurance carrier. An expense constant is a policy fee charged to offset the expense to underwrite and issue a policy. This fee is flat and does not vary depending on the premium size.
Workers compensation policies also now have a charge for terrorism and/or DTEC (Domestic Terrorism, Earthquakes & Other Catastrophic Industrial Accidents). This charge will be a small percentage and the total cost will fluctuate with the policy premium.
At Safeguard Insurance, we are NV workers compensation specialists. We are happy to answer questions about your current policy and provide you with a free rate comparison. Contact one of our knowledgeable agents today and let us show you how we can save you money on workers compensation insurance!