Every company has the same rates for Workers’ Comp Insurance.
If you’re like most business owners, you said “True,” and that is why you need to call me right away. The correct answer is FALSE, and here’s why:
The truth is, the amount you pay for workers’ comp is based on a number of different rating factors, but the one that most people overlook is the Loss Cost Multiplier (LCM). What is a loss cost multiplier you may ask? The LCM is different from one insurance company to the next and is made up of:
Commission paid to agents and brokers
General expenses for rent, payroll and employee benefits
Taxes, licenses and fees
For example: If one insurance company (A) has an LCM of 1.25 and another insurance company (B) has an LCM of 1.50, the second insurance company will charge 20 percent more for the exact same product. Let’s assume the state-mandated rate for your line of work is $5.62 and you have $60,000 in payroll:
Company A would charge 5.62 X 1.25 = 7.025 X 600 (per $100 of payroll) = $4,215 (base premium)
Company B would charge 5.62 X 1.50 = 8.430 X 600 (per $100 of payroll) = $5,058 (base premium)
That is a difference of $843 per year — or 20 percent. It may not seem like a lot, but over 10 years that’s $8,430 that you could be using to pay bills, buy new equipment or take a vacation!
The bottom line is that you should NOT have to pay for an insurance company’s extravagant offices, extravagant lunches, company trips, or millions of dollars in television, radio and newspaper advertising. You need to be insured with a company that manages its bottom line — passing the savings on to you. Want to know how much your insurance company is OVERCHARGING YOU? Call 1-888-440-3756 now and I’ll put together a comprehensive plan for you and your company, all at no charge.
Gordon Quinton, President Impact Work Comp Systems