Work comp insurance is expensive, particularly for general contractors. At Fusco Orsini & Associates, we field questions daily about the cost of work comp insurance for general contractors. Although there is no straightforward answer to the exact price of a workers’ compensation policy, we wanted to give you some suggestions about how insurance companies price policies. Several factors determine the cost of a work comp policy for general contractors. Mike discusses them in his video and writes about each element below.
COMPANY HISTORY
If you are a general contractor, your company history will affect your worker’s compensation rates. Company history includes the number of years in business, workers’ compensation claims history, and your experience modification factor (EMOD). If you are unsure about your EMOD and its effect on your rates, please complete the form below. Our agency places a strong emphasis on helping clients with EMOD reductions and analysis.
CLASSIFICATION CODES
The trades performed by your in-house employees will determine the class codes listed on your policy. A four-digit class code is assigned to each trade, for example, carpentry, plumbing, electrical, and drywall. The general contractor pays the rate associated with each class code per $100 of employee payroll. California work comp differs from other states due to the dual wage classification system. For more information on dual wage classifications, ask one of our agents.
OPERATIONS
The operations of the general contractor will impact the workers’ compensation rates and costs. Examples of functions that may have an effect include the following.
1 – working at heights
2 – the use of scaffolding
3 – confined spaces
4 – work near high hazard areas, such as roadways
5 – the percentage of work subcontracted to others.
SAFETY CULTURE
The safety culture of the general contracting company is imperative to a cost-effective workers’ compensation program. Insurance underwriters and work comp program admins provide more competitive rates to companies with a strong safety program and make it a part of their operations. Examples include weekly safety meetings, job site inspections, ladder safety, protective safeguards, and return-to-work programs. If your current insurance agent is not consulting you and providing these resources, we recommend hiring a new agency. Complete the form below to speak with an FOA agent to discuss our risk management and loss control services.
IN CONCLUSION
We hope this article and video help you understand the factors used to price a workers’ compensation policy for general contractors. Of course, the market for work comp, like other forms of insurance, changes based on the availability of carriers and carrier loss performance. Fusco Orsini & Associates is a true partner in work comp programs. We assist with all functions of a work comp policy, INCLUDING filing a workers compensation claim and the work comp audit. Do not hesitate to call or email us to speak with one of our professional agents regarding your work comp and risk management program.
