Workers Comp - $20,000 minimum premium per year!?!?

[DR01D]

I just asked my insurance agent how much it would cost for workers compensation insurance if my landscaping company added tree service. He said that unless the annual premium was $20,000 or more carrier's aren't interested in providing WC coverage. I am stunned! Are there carriers that provide WC for smaller companies?

I live in the state of Arizona.

Any help would be greatly appreciated!

 

[treecutterjr]

I would check around. That's definitely not true here in Kentucky. It's still high though. Roughly 30% of payroll

 

[BuckmasterStumpGrinding]

Try a company that specializes in WC. That is insane.

 

[treeclimber101]

Your state should have carriers , that's how I am insured a state run company

 

[Toddppm]

I think he must have meant minimum $20,000 in payroll for tree work. Used to be $10k when I started?

 

[sac-climber]

I would check around. That's definitely not true here in Kentucky. It's still high though. Roughly 30% of payroll

30% is good!

 

[jefflovstrom]

30% is good!

Hear that!

 

[treecutterjr]

It is? Compared to what?

 

[treeman75]

I think cali is around 50. Thats crazy

 

[sac-climber]

Most people are floating around 50%....I know a a person, indirectly, who's went up to 125% after a few accidents in the same year. Most people would be closing the doors at that point.

 

[pro94lt]

125? Am I right he's loosing 25 cents on each dollar? Tell me I'm wrong

 

[treecutterjr]

I've heard some individuals are running their employees through a temp agency (not hiring from a temp agency, but actually sending their own employees to the temp firm) so that on paper they will work for the temp and not the tree service. And the temp handles The workers comp and everything
If the temp Agency gets a better ratethat might be worth looking into.

 

[Griff93]

When I have check on it workman's comp premiums, they have been a bit over 50% of payroll. Alabama doesn't require workman's comp until you have more than 4 employees. Unfortunately this means for most people, including me, that you keep less than 5 employees and avoid workman's comp. The problem I've seen is if your small and have workman's comp you price yourself out of the market. I can't just magically add 50% on top of my payroll without passing that cost onto my bids which already get undercut enough by people with no insurance, paying cash under the table, etc. It's getting real tough around here to be completely legitimate unless your real big.

 

[sac-climber]

125? Am I right he's loosing 25 cents on each dollar? Tell me I'm wrong

Time to raise prices!
Again this was secondhand information and tree guys do embellish expenses like fishing stories, so take it with a grain of salt

 

[blades]

WC is a problem, which is why I have no employees anymore. I get the comments about adding help several times a month, my answer is always the same " I can't afford the the grabamint"

 

[treeclimber101]

Best part is whatever you put in for the employee if he gets hurt he only gets about 70% of that a week .... So they make money on Insuring your employees aswell ....... Ha makes ya wanna rush right out there and work hard ...

 

[KenJax Tree]

Who needs WC insurance? Isn't that what the weekly safety meeting is about so you don't need it.

 

[treecutterjr]

Like any other insurance, you have it but hope you don't need it. But you beget not need it and DON'T HAVE IT! You ll be sol.

 

[no tree to big]

I've heard some individuals are running their employees through a temp agency (not hiring from a temp agency, but actually sending their own employees to the temp firm) so that on paper they will work for the temp and not the tree service. And the temp handles The workers comp and everything
If the temp Agency gets a better ratethat might be worth looking into.

We have a guy through a temp agency he is not allowed.to touch a chainsaw or feed a chipper do to wc coverage that is provided by temp agency...

 

[Philbert]

Spent some time working in/with insurance.

125? Am I right he's loosing 25 cents on each dollar? Tell me I'm wrong

You are wrong.
If you pay a guy $10 an hour (before taxes) you pay an additional $12.50 an hour for WC. You total labor cost is $22.50 an hour (plus taxes). If you bill his time for less than this, then you lose money.

Best part is whatever you put in for the employee if he gets hurt he only gets about 70% of that a week .... So they make money on Insuring your employees aswell

WC insurance covers medical costs, permanent disability, and death benefits, in addition to wage replacement. Those costs can make the wage part look tiny very fast - blame this on out of control medical costs, not just insurance premiums.

Lot of guys complain about WC, but sure happy to have it when needed - most smaller companies cannot cover the costs of many less than catastrophic injuries, even if you bankrupted the company AND it's owners. And the rates are based on loss experience: it's high for tree cutters as a group, because . . . . . tree cutters get injured a lot. So, when you see some idiot crew cutting corners, they are costing your firm money as well. When your company gets a little bigger, and has been in business for 3 or more years with a good safety record, most WC programs will provide an 'experience modifier' to reduce the costs that your company pays. If your safety record is worse than average, that experience mod may increase your costs.

So, to a large extent, industries control a big part of their insurance costs.

Philbert