FAQ - Business Insurance

I'm thinking about starting a business. Do I have to carry worker's compensation insurance?
Yes, if you have employees. As an owner, you have the option of rejecting coverage for yourself. However, if you work for or with other organizations a certificate of insurance may ne required. If so, a worker's compensation policy is required. The workers' compensation program is federally regulated and monitored so it's very important to manage it correctly. It can be complicated, so it's best to contact my office to insure you are in compliance.

Is worker's compensation expensive? How is it priced?
Worker's compensation policy prices is based on estimated payroll and the cost for any specific worker is based upon the risk associated with that worker's job classification. At the end of a policy year, the company carrying the coverage audits your actual payroll and the premium is figured retrospectively. For example, if you estimate you payroll for the year to be $10,000, and at the end of the year it's
actually $30,000, you will be responsible for the additional policy costs. This is an easy way for businesses to get into financial trouble, so it's important to understand how it works. Contact my office for a complete explanation.

Why do I have to provide a certificate of insurance for workers' compensation to companies that I may sub-contract for?
Because at the end of the year the companies payroll will be audited and will be responsible for paying workers' compensation premiums. Because of this, many companies will require you to provide your own certificate.

Have a question? Ask John!