Worker’s Compensation – A Few Thoughts
Over the past couple of years, our insurance agency have received a healthy increase in calls concerning Worker’s Compensation Insurance in Arizona, in fact over the past six months, we have had almost double the amount of inquiries versus the previous six months. Now, that’s the good news, when discussing Worker’s Comp, regardless whether you’re a potential client or current client looking to acquire coverage, the conversation in most cases is going be an interesting one, when in many cases, the worker’s comp premium will turn out to be higher than their General Liability premium.
In Arizona, there really isn’t a choice. Workers Compensation Insurance is mandatory if your business has employees and according to the Arizona Corporation Commission, even if you are a one owner of an LLC, the state requires your business acquire a comp policy. As an owner, you do have the right to exclude yourself from coverage if you so choose. Having a Arizona Workers Compensation Insurance policy will provide coverage for your company’s employee’s medical expenses and some portion of their lost wages should the employee suffer an injury while they are on the job.
When looking at worker’s compensation insurance in AZ, you can think of it as a state-regulated, no-fault liability insurance which will cover your company’s employee’s medical expenses, rehabilitation expenses, lost wages, and death that resulted from a work-related injury or an illness. Regardless of whose fault it is, your company’s employees are eligible for worker’s compensation benefits if they suffer an injury while on the job. Those same worker’s compensation benefits will also apply should an illness or injury occurs in the performance of their job while conducting an employer’s business as well. In most cases, having this type of workers comp coverage, will protect an employer from being sued by an injured worker. We highly suggest it would be beneficial to your company to do some research on your AZ workers compensation insurance state regulations and rules. If your company also has employees either in multi-states and sends its employees to other states for work, you should make your current comp carrier aware of this so your employees will be covered in those states should they have an unfortunate incident and have to file a claim.
When discussing workers comp with either a new prospect or an existing client we try to learn as much as we can about their company does, what their projects may involve and what duties their employees will be doing for them so we can find the proper work codes that will apply to their needs. Once we have gathered as much information as we can from the client, we will compile of list of comp codes that most likely be used to determine what the worker’s comp premium will be.
One thing we do for our clients is to urge them as strongly as possible is to keep as detailed time card records as possible, so when the annual comp audit is performed, we will have information available for the auditor, what the employees were doing on the various projects during the year because in most cases if you do not keep these detailed records, chances are very good that they will put your payroll in the highest cost code as they can. Keeping detailed employee time cards can save your company serious money.
Once the we go through the comp process, estimating what the premium will be, invariably the client will say something to the effect I would be better off just to hire independent contractors, simply 1099 them and not have to deal with all the paperwork and reporting, not to mention the cost of the workers comp policy itself. It just doesn’t work that way anymore. Many of the Workers Compensation Insurance carriers are installing rigid guidelines regarding the use of independent contractors.
We advise our clients to check with their comp carriers on what their rules are regarding the use of independent contractors before you hire one, otherwise you may think that amount you paid the contractor is exempt when in fact your company will be charged for it when the audit is completed. Another good idea is to consult the Arizona State Compensation Board regarding their rules and regulations and in some cases may even consult your attorney to make sure your company is in compliance. We realize that being the head of a business in many instances requires you to juggle many responsibilities ranging from payroll, scheduling, marketing, inventory or accounting to one of a dozen or more things that come up in the day to day operations of your company.
We also know that like many owners, workers comp reporting is not their favorite activity, but if not managed properly, it could cost your business dearly in additional comp premiums. We feel it’s extremely important that a business should select the proper AZ workers compensation insurance based on their particular compensation needs, as well as doing everything possible to ensure there is a safe work environment for their employees.
PJO Insurance Brokerage has access to various workers comp carriers and also has worker’s comp markets for those hard to place industries like roofers, welders, framers, office staff, plumbers, and electricians to name just a few many different categories out there. If you are looking for AZ workers compensation insurance for your company, please call or email us and let PJO Insurance Brokerage find the proper worker’s comp insurance carrier to fit your company’s comp needs.
PJO Insurance Brokerage – Patrick O’ Neill
4103 East Prickly Pear Trail
Phoenix, AZ 85050