How Much Does It Cost?
If you are a new business, your insurance broker will contact NCCI with the following information:
- Number of employees you have with job description for each employee to assign classification codes.
- Total estimated annual payroll to assign your premium.
Again, if your business is new or your are taking over an existing business, the NCCi will base your premium on two factors, your total estimated annual payroll and your experience or claims history mod. If your business is a new business, say a gift store, the NCCI will find a similar business to yours, with the same general amount of employees, and assign your company an experience mod. Experience mods are increased or decreased every three years and are determined by how many workman's compensation claims your business submits to your insurance carrier.
The first amount of your premium is based on your estimated payroll and classification code. If you have all office workers for instance you would only have one classification (8810). If you had industrial workers, drivers, or any other type of worker, you can obtain the NCCI classification code from your insurance broker. Next, your insurance agent will ask you to estimate annual payroll by classification. For example:
Office workers - three - total estimated payroll - $60,000 - Depending upon the classification code assigned, a experience mod will be assigned per $100 dollars of payroll. For example $60,000 x .08 (experience mod) = $4,800
Driver - One - total estimated payroll - $35,000 - This classification code and experience mod may be higher due to the possibility of an accident. For example $35,000 x .010 (experience mod) = $3,500
Mechanic or Janitorial - Two - total estimated payroll - $50,000 - Again different classification code and experience mod. $50,000 x .10 = $5,000.
In this example, your total premium for twelve months of workman's compensation coverage would be the $4,800 plus $3,500 plus $5,000 or $13,300. Every workman's compensation insurance carrier will break your annual premium into twelve monthly payments or in this example a monthly amount due of $1,108.