15 Terms to Know When Renewing Workers Compensation Insurance


The insured person is the business or entity involved in an insurance relationship that is protected under the policy. The insured can be an individual, a business, or a non-profit organization.


The Insurer is a term referring to the insurance carrier who is offering coverage under the policy.

Additional Insured

An additional insured is anyone, other than a policyholder, who is also covered by an insurance policy. This coverage may be limited to a single event or in some instances it lasts the lifetime of the policy.


The Insurance Carrier is the company who is providing the protection provided under an insurance policy. Some carriers have only captive agents who offer only their products while others partner with independent insurance agents who sell the products and services of many carriers. The carrier is responsible for processing a claim, not an insurance agency.


The underwriter is the person within the carrier who makes a decision to offer coverage or not, and what to charge for that coverage. They make this decision based upon the policies of the state they are offering coverage in and the appetite of the carrier they work for.


The agency is the business that helps individuals and businesses decide which types of insurance are best for their situation. The agency acts as a middle man who sells the products and services of a carrier. They do not service the policies when a claim arises. It is a good idea to keep your agent in the loop when a claim arises so they can hold the carrier accountable if they do not live up to their end of the policy terms.


The term producer, also referred as the agent, is the salesman in charge of finding the proper products and services for both individuals and businesses. The producer is your first point of contact between the insurer and the insured.

Named Insured  

Any person, business or non-profit organization who is specifically named as an insured on the insurance policy. It is important to realize that this is different from entities who are unnamed but may fall within the policy definition of an insured.

Date of Injury (DOI)

The term date of injury refers to the date the injured employee first experienced an injury. If there was an incident, it is the date of the incident, but for long term use injuries this is the date the injury was brought to the attention of the business or organization.

First Report of Injury

The first report of injury is a form a business must fill out during the workers compensation process. This term refers to the date the employee first reports an injury to their superior. This may be the same day as the date of injury, but it also may be at a later date. It is important to develop some type of incident report and require managers to fill them out any time there is

National Council on Compensation Insurance (NCCI):

NCCI is the term that refers to the National Council on Compensation Insurance. NCCI gathers data, analyzes industry trends, and provides objective insurance rate and loss cost recommendations to the states it partners with. States that use NCCI typically enjoy lower rates on workers compensation insurance premium.

Experience Modification Rating

The experience modification rating is a term that refers to a number used by insurance companies to gauge both the past cost of injuries and the future chances of risk. This rating has a strong impact on whether a business will be offered workers compensation insurance coverage and what the carrier will charge for that coverage.

Loss Ratio

The loss ratio is a ratio of the insurance claims paid by an insurer in relation to the premiums earned from the insured. It is usually calculated over a one-year period.

Hammer Clause

A ‘Hammer Clause‘ is a provision within an insurance policy. The provision gives the insurer the right to settle an insurance claim for an undisclosed amount. If the insured decides not to agree with the settlement they must take on some of the risk involved with moving forward without a settlement. On some policies, the insured takes on all of the risk, but most of the time the amount is either 70/30 or 50/50.

Assigned Risk Provider

The assigned risk provider is commonly referred to as the pool or the state fund. This term applies to a workers compensation system. In the United States, the workers compensation insurance systems are governed by the state and not the federal government. Each state provides for a provider of last resort. This provider of last resort provides workers compensation coverage for businesses that cannot find coverage on the open market. In some instances, the business cannot find coverage because of the industry the business operates. In other circumstances, the business cannot find coverage because of their claims history (the business has a lot or a severe claim on the record). The Assigned Risk Provider offers coverage almost always at a higher rate then the open market. In most states, once you are in the pool you must stay in the pool for 2-3 years.

Swimming Pool Maintenance

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NCCI Class Code 9014 | Swimming Pool Maintenance

NCCI stand for the National Council on Compensation Insurance.  NCCI is the main governing body in most states for workers comp codes. Not every state partners with NCCI for their workers compensation system, but those that do tend to enjoy favorable rates on insurance premium. The classification codes set by NCCI generally include a variety of operations related to what the employees do on a daily basis. Swimming Pool Maintenance Companies are given NCCI Class Code 9014. Other businesses included within this class code are Janitorial Services (both residential and commercial), Chimney Cleaning, Environmental Clean Up, Exterminator, and Carpet Cleaning. Swimming Pool Maintenance Companies are unique businesses that exist within a niche.

Swimming Pool Maintenance Equipment on the side of a pool.

Only a few carriers are willing to quote swimming pool maintenance companies. Because of the specialization of this industry, there are risks that faces these businesses that other industries do not face. When the company adds construction to their list of operations, carriers are much less likely to offer coverage. This is a good reason to partner with an independent insurance agent because an independent agent can give you unbiased advice. They can give unbiased advice because they are not tied to one carrier. This allows them to advise you on the products and services of the entire market instead of just the one carrier a captive agent represents. When you are thinking about expanding your business, it is wise to consult with an insurance professional (like an independent agent) to determine if the expansion creates new risks and if those risks are worth the potential new revenue from the expansion. Regardless of who a business  decides to use as their insurance agent, the knowledge of an experienced insurance professional is extremely valuable. Determining what risks your business faces, how to best protect against those risks, and what level of risk the business owner is comfortable with are all aspects of insurance that should not be taken lightly. When determining how to best insure your swimming pool maintenance business, here are seven types of insurance all Companies should consider.

Swimming Pool Cleaner operating underwater.

General Liability Insurance (GL)

General Liability Insurance covers a swimming pool maintenance business for common property damage and bodily injury to outside third parties. Common slips, trips, and falls are common claims covered by a general liability policy. In some instances, a GL Policy will provide reimbursement for medical costs, funeral expenses, and eve court awarded compensation up to the limits of the policy.

Workers Compensation

Workers Compensation Insurance is a policy that is required by law in nearly every state across the country for nearly every business that employs people. If a swimming pool maintenance company is owned and operated by one person, a ghost insurance policy might be ideal. If the business does have employees, a workers compensation policy needs to be secured. A workers Comp Policy provide injured workers with medical costs and some wage replacements for the time they are hurt and not able to work. The amount of wage replacement is typically 60%. The business benefits from having the peace of mind to know they cannot be sued for injuries that occur as a part of normal business operations.

Commercial Property

Commercial Property Insurance is needed regardless of whether the business owns or rents the facility. A Commercial Property Insurance Policy is sold on a replacement basis or on an agreed upon amount. It is almost always best to secure a replacement basis policy. This is because over time the price to build a structure rises. Also, there may be new ordinances and laws that the new facility has to abide by. In addition, if the property needs to be completely rebuilt instead of repaired, it is expensive to remove all debris before new construction can begin. A replacement level policy will cover these cost up to the limits of the policy.

Business Auto Insurance

A Business Auto Insurance Policy is needed for a swimming pool maintenance business if they own vehicles, but also if the business has employees who use their own personal vehicles for work. Also, some form of insurance is needed if the employees drive leased vehicles. If the business owns the vehicles, a traditional business auto policy will suffice. If the business has employees who use their own vehicles or who use rented vehicles, a hired an non-owned auto policy needs to be added to the suite of coverages a business purchases.

Inland Marine Coverage (Floaters)

Inland Marine Coverage is needed by a swimming pool maintenance business if they have expensive equipment that is frequently transported to third party locations. If the equipment is stored at a third party facility, if the equipment is transported on a trailer, and if the equipment is transported attached to the outside of a vehicle; it is only covered by an inland marine insurance policy. The equipment is not covered by a business auto or a hired and non-owned auto policy.

Umbrella Insurance

An Umbrella Insurance Policy is a cost effective way for businesses to ad to the limits of all existing policies. An Umbrella Policy sits on top of the existing policies and it kicks in when the limits of those policies have been met. If the limits of an existing policy are met, the umbrella policy will kick in to cover any additional costs up to the limits of the umbrella policy. The key to an umbrella policy is that the underlying loss most be a covered loss by an existing policy.

Business Owner’s Package (BOP)

A Business Owners Package is frequently referred to as a BOP. This is a good way to purchase insurance for two reasons. One it saves the business money. Insurance carriers are more aggressive with discounts when they know they will be getting more business from a small business. Also, a BOP is a good way for a business to purchase insurance because it prevents there being a gap in coverage. A gap in coverage occurs when a claim occurs and there is an exclusion with both policies related to the claim. For example, if the business purchases a business auto policy from one carrier and an inland marine policy from another carrier, there may be an exclusion on both policies when an accident occurs. If both policies are purchased through the same carrier, the likelihood of a gap in coverage is much smaller.


Wind and Hail Damage

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Five Tips to prepare you business for Spring Wind and Hail Storms.

In most of the United States, Spring brings about an elevated risk of property damage related to weather events. At the top of the list of weather related insurance claims is Wind and Hail Damage. The damage may be caused to a businesses equipment as well as property. If you own a business that has extensive property and equipment, especially if it is stored outside and you live in a high risk area, you need to prepare your business for Spring Weather. Here are five things to look out for as you prepare your business for the Spring weather season.

Analyze What Weather Risks Your Business Faces

It is important to first determine what risks you face and the likelihood of an event occurring. If you live in Kansas, it is obviously more important to prepare for Tornadoes as opposed to Hurricanes or Earthquakes. Having a discussion with the key employees within your organization can help you determine what risks you, what risks you do not face, and what level of risk exists for each liability. Partnering with an independent insurance agent is a good way to find out about risks you may not realize you face and how to best protect your business from the risks that do exist.

Inspect The Property

Prior to the Spring Season, in preparation for wind and hail damage, it is important to do a thorough inspection of the entire property. Have someone who is trained examine the roof, the gutters, the HVAC System, and any specialized parts of your property. If there are trees on your property, make sure they are properly trimmed to avoid damage to the facility.

Secure All Equipment

Especially if you live in an area that is prone to wind and hail damage, it is important to secure a designated spot for all equipment and other valuables at the beginning of the Spring Season. Equipment stored outdoors should fastened securely to prevent it being lost or stolen after a storm.

First Keep Your Employees Safe

When a storm hits, it is the right thing to do to take care of your employees. Keeping an eye on the weather forecast will help you determine if employees who work outside need to be taken off the job. Keep employees away from windows and if necessary, take shelter in the safest portion of your facility. Put an emergency plan in place ahead of time and practice it from time to time.

Don’t Forget Insurance

Severe weather can hit anywhere, especially in the Spring Months. If you live in an area that is likely to experience wind and hail damage, it is important to speak with your independent insurance agent about what is the best package of insurance for your business to secure. First and foremost, do not base your decision to buy insurance solely on price. Margins for insurance carriers are extremely tight. Credits and discounts are not substantial on insurance premium. If one carrier offers a policy that is noticeably lower in price than a number of other carriers, there is usually a reason for that lower price. The reason for a lower price on premium is rarely because the carrier offering the lower price is known for offering additional limits or providing exceptional customer service. Partnering with an independent insurance agent allows you to get unbiased recommendations about each carrier because the independent agent is not tied to only one carrier.

Nevada Workers Compensation Rates 2019

In 2019 Nevada Workers Compensation Rates will be Some of the Lowest in the Country

Effective the first of March, 2019; Nevada Workers Compensation Rates will be 8.1% lower than the previous year. This is great news because rates on coverage were already the 46th most expensive state for purchasing coverage according to the  Oregon Premium Rate Ranking Study. A workers compensation ranking study done every other year by the state of Oregon. This study found the cost for coverage in Nevada is 71% of the national median. Now not all businesses will see the same amount of savings. Depending upon the industry classification code and the experience modification rating of the business, the savings may be smaller or larger than the recommended premium rate.

Nevada Desert Highway

Why are rates so low in New Mexico?

There are numerous reasons why there will be a decline on workers comp rates in Nevada for the year of 2019. According to the Nevada Division of Insurance, “claim frequency continues to decline countrywide due to improvements in automation and workplace safety”. Because of the decline in claims frequency insurance carriers are forced to pay out less in insurance claims. As a result of these declines, insurance carriers are able to pass some of the savings on to customers. This is great news for the business environment in Nevada. A state that already experienced some of the lowest rates for workers compensation insurance.

Las Vegas, Nevada

What is Unique about the Workers Comp System in Nevada?

The first thing that is not so unique about the workers compensation system in the state of Nevada is that all businesses must purchase coverage and Nevada operates under what is referred to as a no-fault system. A no fault system protects employees by providing medical and disability benefits along with some lost wages. The system also protects employers by limiting liability in the event of a workplace injury. All of these benefits are provided no matter who is at fault for the injury to an employee.

In the past Nevada was a monopolistic state. What it means to be a monopolistic state is that the employer must obtain coverage from a compulsory state fund or qualify as a self-insurer. This means all businesses that operate within the state must purchase coverage from one provider. There is no open market for coverage. To be self insured, the business must meet certain financial criteria to qualify. This is no longer how the Nevada Workers Compensation System is operated. Currently, Nevada is an NCCI state. NCCI stand for the National Council on Compensation Insurance and this partnership means the state pool for high risk businesses t is administered by NCCI. In most instances, states who partner with NCCI enjoy favorable rates for workers comp coverage.

Lake Tahoe, Nevada

The State of Utah Workers Compensation System in 2019

Utah Workers Compensation Rates 2019

The Utah Workers Compensation System is different from the way other states administer the ‘Exclusive Remedy’. The business community benefits from these differences in the form of some of the lowest rates for workers comp premium in the United States of America. In the state of Utah, workers compensation is a no-fault insurance system. The fact that Utah uses a no fault system means that benefits are provided to the injured employee no matter who is at fault for the worker injury. One of the most impactful aspects of the Utah Workers Compensation System is the strength of the Assigned Risk Provider. There are also a few bills passing through the Utah State Legislature that may have a positive impact on the rates businesses pay for workers compensation insurance in the future. Here are several aspects that contribute to the strong Utah Workers Compensation System.

How is the Utah Workers Compensation System Different?

Utah Insurance Department?

The Utah Insurance Department is the governing body that regulates the workers compensation system. The Insurance Department approves the premium rating plans used by workers’ compensation insurance carriers. Premium rates charged for workers’ comp in Utah are revised annually based on statistical data provided by the National Council on Compensation Insurance (NCCI).

What is the Utah Labor Commission?

The Utah Labor Commission is another state regulatory agency that handles disputes within the workers compensation system. These disputes invlove an injured worker and either the insurance company or the employer. Because of the success of this commission, less than two percent of all claims wind up in litigation. The saves the system as a whole an enormous amount of money in saved legal fees. In most cases an administrative law judge is assigned to the case in order to determine what benefits an injured workers is entitled to. In some situations, there is a representative with the employer is asked to provide extensive evidence about claims.

Public Private Partnership

The Workers Compensation System in the state of Utah is a public private partnership between the state government and two outside entities. Those entities are the National Council on Compensation Insurance (NCCI) and The Workers Compensation Fund (WCF). NCCI creates classification codes and recommended pure premium rates. WCF is the state provider within the state and they commonly dominate a large percentage of the market.


When it comes to the system for Workers Comp Utah, all employers are required to carry coverage. There are only a few exceptions to this rule. One of those exceptions is that sole proprietors and partnerships who have no employees other than the sole proprietor or partner are not required to purchase coverage. All General Contractors are required to ensure when they hire subcontractors (including sole proprietorships, partners and corporate officers), that those subcontractors have workers comp coverage. If the subcontractors do not have workers compensation coverage the subcontractor is considered an employee of the contractor. When this occurs, the general contractor must carry work comp coverage. Most states have additional exclusions for certain circumstances. Because there are so few exclusions in the state of Utah, all businesses must purchase coverage. This additional amount of businesses who have to purchase coverage contribute to driving the price of premium down.

Why are Utah Workers Compensation Rates so Low?

Strength of the State Fund

The Workers Compensation Fund (WCF) is the strongest assigned risk provider of any state in the country. Depending upon the year, WCF controls nearly 60 percent of the market for workers comp. This dominance of the market place allows WCF to control what other carriers charge for premium. If other carriers want to compete for coverage in Utah, they must keep their premium rates at or near what WCF Charges.

House Bill 288

In 2018, House Bill 288 (HB288) passed the state legislature. HB288 makes it unlawful for employer to interfere with an employee’s ability to seek workers’ compensation benefits. In addition, it made it illegal to retaliate against employees for seeking benefits. This bill establish fines of up to $5,000 for each individual violation.

Senate Bill 75

Senate Bill 75 (SB75) was passed to allow the Division of Industrial Accidents to waive the penalty for failure to purchase workers comp.  SB75 states ‘the violation must be the employer’s first violation and the period of noncompliance must be less than 180 days’. This is intended to allow businesses one mulligan when it comes to not securing coverage.

Commercial Insurance Checklist

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Do You Know What Your Business Needs For its Next Commercial Insurance Renewal?

Commercial Insurance Checklist

Familiarize yourself with the jargon

Buying commercial insurance is something a small business owner has to do once a year. It is not something most business owners think about on a daily basis. When interacting with employees within the industry, there may be an awful lot of small business insurance jargon that is not exactly common knowledge to the general population.

Is the Address Still the Same?

The insurance agent will need an accurate and up to date address for the business. If the business has moved, it is necessary to inform the carry of the new address.

How many employees do you now have?

The insurance agent will need to have an accurate count of employees. Employee turnover is common in most industries. If you can provide your agent with the number of employees now, the average number of employees throughout the past year, and the man hours worked for each employee classification code; it will help your agent get a more accurate quote.

Have you purchased any new equipment, including vehicles?

Informing your insurance agent of new equipment purchases is important for a number of reasons. Ideally you should inform your insurance agent when you purchase the vehicle or the new piece of equipment. The value of the new vehicle will impact the premium rate for either the commercial auto or inland marine insurance policy.

Does your Business offer any new goods or services?

If your business started selling new products or offering new services, it may change the classification of your business. This is especially important if your business begins offering anything with a driving risk. From an insurance perspective driving is an activity that significantly increases the frequency and severity of insurance claims. Because of this, business that have employees who drive as part of their daily routine will pay more for commercial insurance.

Assess Your Risk

It is important to periodically assess the risks your business faces. Prior to renewing all commercial insurance policies is a good time to think about any accidents that occurred throughout the year including any near misses.

Speak Long and Honestly with Your Insurance Agent

After you have assessed the risks of your business internally, it is important to schedule an adequate amount of time to talk over an concerns you have with your insurance agent. If anything has changed, they need to know about it. If anything concerns you, your insurance agent can act as a wealth of knowledge to prevent accidents from happening and for properly protecting your business from the risks you actually face.

Make sure you have all required coverages

Workers compensation and general liability insurance are required by law for most businesses in most states. You will need to check with the state governing body within your state to see if their are any additional coverages required. If your business sells or serves alcohol, it is usually a requirement to carry liquor liability insurance.

Ask About Additional Coverages

Do not try to skimp by on only the bare minimum coverage. This is typically a recipe for disaster when a claim occurs. Most businesses need additional coverages than just GL and WC. Speaking long and honestly with your insurance agent can help you make sure your business is properly protected. Remember they are not just there to sell you an additional product, they are there to help you determine how much coverage you need and if there are any types of coverage you may be able to do without.

Shop Around

Every few years, it is a good idea to shop around your policy with multiple carriers. Partnering with an independent insurance agent is a good way to do this efficiently. An independent insurance agent can shop your policy out for you and get quotes from multiple carriers are in one stop. This should be able to get your business better coverage at a lower rate. Additionally, because an independent agent is not tied to one carrier, they can give you unbiased advice about the coverages you are considering. margins within the insurance industry are extremely tight. When one carrier offers a noticeably lower rate, there usually is a reason for it. The reason for the lower rate is rarely because the policy provides more coverage or the carrier offers better service throughout the life of the policy.

What is a Ghost Policy?

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And Who Might Benefit From a Ghost Policy?

A Ghost Insurance Policy is a type of Workers Compensation Insurance Policy where the owner of a business is excluded from coverage and they are the only employee of the business. There must be no additional employees for the business in order for a Ghost Policy to be appropriate. In most cases, this type of policy is purchased by a contractor or subcontractor to satisfy coverage requirements within a contract they are agreeing to with another contractor or business. The policy is not designed to provide workers compensation benefits except when the employer hires employees or becomes liable for an uninsured subcontractor. Not all states allow Ghost Policies, but where they are available they can be the best scenario for many small contractors and subcontractors who have no employees or subcontractors.Ghost

How Does a Ghost Policy Work?

In most cases, the term ghost policy refers to a workers comp policy purchased by a business owner, typically a sole proprietor, who is the only employee of the business. The coverage basically provides no “real insurance coverage”.  It is a minimum earned policy where the owner is excluded from coverage on the Acord 130 Form and there are no active or anticipated employees for the policy period. What a minimum earned policy means is that the policy includes the standard state expense constant and the insurance companies minimum required premium for a policy. Businesses request this type of coverage because it is normally  cheaper than a policy where the owner wages are applied to the policy.

Why Might a Business Want a Ghost Policy?

There are a number of reasons why a business would choose this instead of a traditional workers compensation policy. First and foremost, this type of policy enables a business owner to have a certificate of insurance issued. This is typically required to enter in to most contracts. A ghost policy can cost a significant amount less compared to a workers comp policy including the owner and all of their payroll. Finally, a Ghost Insurance Policy provides the business with employer liability protection, This type of coverage may be needed in the event an employee is hired or the business makes a payment to an uninsured subcontractor. It is important to remember, ghost policies are audited for additional exposure just like a traditional workers compensation policy. This occurs at the end of each policy period and if the requirements for a ghost policy are not met, the business may owe additional premium.

Louisiana Workers Compensation Rates 2019 Are Declining

5 years of Continued Declines for Louisiana Workers Compensation Rates 2019

Starting on May 1st, 2019 the Business Community will be saving 5.6 percent on average for Louisiana Workers Compensation Rates 2019. Louisiana Insurance Commissioner Jim Donelon said, “Rates have had a cumulative drop of 19 percent over the last five years and 51 percent over the last 20 years.” This is a very good sign for the most businesses operating in the state of Louisiana. Depending upon a number of factors, some businesses will see a larger decline in workers comp rates and other businesses will receive a smaller decline. Overall, the business community throughout the state will be saving money on workers compensation insurance premium in 2019. Louisiana Workers Compensation Rates 2019

Why are Louisiana Workers Compensation Rates 2019 Declining?

The agency said workplace safety is a factor. Louisiana has one of the lowest non-fatal work-related injury rates in the U.S., according to the Bureau of Labor and Statistics.

Louisiana Workers Compensation Rates 2019 are declining again. There are a number of reasons for the declining rates. At the top of the list of reasons for declining rates is competition in the market place, improved workplace safety, and better risk management practices being used throughout the business community. According the the Bureau of Labor and Statistics, Louisiana has one of the lowest non-fatal work-related injury rates in the United States. Speaking about the reasons for the decline in premium Donelon said “Louisiana businesses are benefiting from the competition in the workers’ compensation market. Through improved workplace safety and better risk management practices, rates have continued their downward trajectory and are more affordable for businesses statewide”.New Orleans, Louisiana

What Can Business Owners Do To Enhance Their Savings?

Partner with an independent agent

Partnering with an independent agent is usually the best way to get the most comprehensive coverage at fair rates. A traditional agent (captive agent) sells the products of one or a select few carriers. If that carrier is not hungry to quote the policy you are looking for or the industry you operate in, they may not offer a competitive rate.

Shop Around your policy

It is not a wise decision to switch carriers every year based upon a slight drop in premium. Long term relationships do mean something, especially when you have a claim or a year where your business has several claims. It is also a good idea to shop your policy around periodically to make sure your carrier is competitive with the current market place.

Focus on Safety

Safety is the most important thing any business can emphasize to make their operations more appealing to an insurance agent. This is because businesses who focus more on safety have a tendency to file less insurance claims. This positively impacts a businesses experience modification rating and can have a long-lasting impact on what your business pays for commercial insurance.




What is NCCI?

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NCCI is a non-profit insurance rating bureau dedicated to fostering a healthy workers compensation system for the states the organization partners with. NCCI gathers data, analyzes industry trends, provides objective insurance rates, and loss cost recommendations in an attempt to bolster the health of the systems within the states it partners with.


NCCI currently partners with 35 states to provide pure premium ratings, 11 states have their own rating bureaus, and there are four states that are referred to as Monopolistic States. These four states; North Dakota, Ohio, Washington, and Wyoming do not represent workers compensation policies that are bought through another states system. This causes a bit of a headache for businesses that operate in more than one state and one of these states is one of them. Most workers compensation carriers have specific packages for these types of businesses, but it does add to the cost a bit when purchasing coverage. The 11 states who have their own rating bureau do so for a number of reasons. Some states, like New York and California, have economies that are so large and the economies so unique the state legislature feels the state governing body can do the task better in house. For the most part, states that partner with NCCI see favorable rates on workers compensation premium for the business community within the state.

Three Main Tasks Provided by NCCI:

  • Obtain and Provide Accurate Statistical Loss Data
  • Scopes Manual
  • Set Manual Rates for Workers Compensation Insurance

NCCI Scopes Manual

Obtain and Provide Accurate Statistical Loss Data

Data collection and statistical analysis is one of the best assets of NCCI for the states it works with. Collecting all of the claims history from each carrier operating within a state and validating the data is a huge undertaking. This is a job that would be very costly and time consuming for the department of insurance to take on. The ability to have an organization like NCCI to take this process off the hands of the state governing body allows the workers compensation systems to pass this cost savings on to the business community within the state.

Scopes Manual

The NCCI scopes manual is used by insurance professionals to identify the NCCI workers compensation class codes associated with each employee based upon the activities the employee partakes on a daily basis. Each year there are around 700 different job classification codes. These codes are for the employee and not the business. The code is a three or four digit number associated with a type of work. If you have employees who work in an office setting for parts of their job and out doing other activities at other points of the day or week, than it is important to keep an accurate payroll for those differences. The more accurate your payroll is, the easier the audit process will be at the end of the term.

Set Manual Rates for Workers Compensation Insurance

The rate making process is another huge undertaking that NCCI takes on for its partner states. The rate making process is the largest determining factor towards what businesses within a state pay for workers compensation coverage. The rates are mathematically based, producing an objective pricing system. Each ncci class codes is given a number and that number is multiplied by the employer’s annual payroll in $100 units.  This is often referred to as the “manual rate”. This rate covers security for the system in the form of weekly benefits paid directly to injured workers. The manual rate also covers the workers compensation system by making sure payments to doctors and hospitals are covered. By doing an effective job of this service NCCI saves keeps the state business community solvent and provides a healthy business community for both the employer and employee.



Kentucky Workers Compensation Rates Are on The Move

Marking more then a decade of declines, Kentucky Workers Compensation Rates are declining again in 2019

In Kentucky, businesses will be paying less for workers compensation insurance in 2019. They will be paying 10.8 percent less on average compared to 2018. Amazingly, this is the 13th consecutive year of continuing declines for workers comp rates throughout the state. There are certain industries that will see a majority of the declines. Those industries that benefit the most  include manufacturing, office and clerical, contracting, as well as goods and services. Depending upon the specifics surrounding the work provided, some industries may see little or no decrease on Kentucky Workers Compensation Rates.  Mining is one such industry that will not be benefiting from declining workers compensation rates. In 2019, Coal Classes increased 28.4 percent for surface mining and 29.5 percent for underground mining.  For the most part, most industries operating in the state of Kentucky, will see improved workers comp rates in 2019.

Seal for the Commonwealth of Kentucky

Why are Kentucky Workers Compensation Rates Declining?

Kentucky Workers Compensation Insurance Rates in 2019 are declining marking more than a decade of continued declines. There are a number of reasons for these declines. Stability in written premium is a strong reason why premium rates remain stable. Also, lower combined ratios throughout the state, and lower loss-time claim frequency have contributed to keeping the market stable and premium rates low.  Some legislative reforms have contributed to the continued decrease in Kentucky Workers Compensation Rates in 2019.

House Bill 2 (HB2) was another substantial factor in continued positive rates for workers comp coverage. HB2 cuts off workers’ compensation benefits when the employee becomes eligible for Social Security benefits, two years after the injury or last exposure. Also, HB2 attempts to re-examine the cut-off provision attempting to be all-inclusive. Now all income benefits will terminate when the employee reaches seventy (70) years of age, or four (4) years after the injury or last exposure, whichever last occurs. Previously the state terminated benefits based on social security eligibility. Insurance carriers, who are actively quoting policy in the state of Kentucky, anticipate HB2 will result in lowering the amount insurers pay out for part-time and permanent disability benefits.

Louisville, Kentucky is a hotbed for horse racing

Kentucky Workers Compensation System Over Haul

The Kentucky State Legislature decided over the last half of 2018 to overhaul the workers compensation system. This will be the most drastic changes to the state system in more than two decades. HB2 spearheaded these changes. HB2 aimed to attack the underlying costs within the system and improve how the system works for everyone involved. Medical expenses and benefits will be impacted. There will also be steps to tackle the growing opioid epidemic within the state of Kentucky.  The overhaul will implement pharmaceutical medical treatment guidelines for medical facilities working within the workers compensation system.  The guidelines are trying to deliver appropriate care to injured workers while limiting waste related to opioid abuse.

In addition to addressing the opioid epidemic, HB2 is also attempting to increase maximum compensation rates temporary and permanent partial disability benefits. These improvements create access to vocational rehabilitation services and makes improvements to the dispute resolution system. The final big change brought on by HB2 is the bill places a 15 year benefit cap from the date of injury that will apply to some cases (not all cases). Most workers who fall in the regulations for this cap eventually return to the workforce and the issue never becomes a problem for the injured worker. It will limit the amount insurers within the system have to pay for some permanent disability claims.

How Can Business Owners Maximize Savings?

Embrace an Ergonomically Friendly Workplace 

Ergonomics in the workplace is gaining support for many industries for a variety of reasons. A lot of insurance claims result from repetitive use injuries. Setting up your employees with the most ergonomically friendly work station can go a long way towards preventing injuries and keeping the costs of insurance claims down.

Monitor Employee Morale

Monitoring employee morale can be an effective way to keep employees happy, healthy, and productive. Disgruntled employees have a tendency to fester and create a number of disgruntled employees. When employee morale is low, an unsafe work environment can happen. Talking to employees and taking their recommendations seriously can help your business improve employee morale and help your business in a number of ways.

Pat Attention to all Near Misses

The best way to learn from near misses is to create an atmosphere where employees feel they can talk about safety situations without fear of repercussions. Honesty is always the best policy. Allowing your employees to talk to you about safety situations allows a business leadership team to learn from the near misses and improve the operations moving forward.