Part One: Credits
When purchasing Workers’ Compensation Insurance there is something that you should know up front; the price is not the price. There is a complex system of debits and credits that can increase or decrease your rate. Which debits and credits come into play is something that is negotiated between the broker and the insurance carrier.
Having the right broker, one who is willing to advocate for you to get your credits and remove debits is the key to making sure that you are receiving the lowest rate possible.
- What are credits?
Credits, simply put, are a discount off your policy. On a $100 policy a 25% credit would take it to $75. Most carriers can offer up to a 40% discount to qualified policyholders. The key to making sure that your business gets all of the credits it is entitled to.
There are automatic discounts that can be had using web sign ups. Most underwriters will put in a light amount of credit just to see if it will sell. It’s sort of like getting life insurance by filling out a postcard.
Available credits include the premium discount, a discount based on the size of your policy, and discounts for having programs in place for safety and drug free workplaces. If you really want to get the best deal use a broker.
A good broker cultivates a relationship with the policy writer and works with them on a personal basis. When push comes to shove the relationship can work in your favor in finding those “other” credits. Your broker should ask at least once if not twice for credits on behalf of the client. If you don’t ask you won’t get.
At Leaders Choice we work hard at maintaining good relations with our underwriters.
In our next blog we will take a look at debits.