Yes, the premium for workmen compensation insurance policy changes every year. As the premium is decided on the basis of occupation and wage of the worker, the premium also changes accordingly. Here are some of the factors due to which premium of workmen compensation insurance policy changes:
- Change in payroll – As stated above, the salary structure in the company changes the insurance premium. If there is a salary appraisal, it revises the insurance premium rates as well. Also, when a business grows and incurs more payroll, it is natural for employers to expect a rise in the cost of a worker’s compensation policy because there is a direct relation between the payroll and premium.
- Change in business operation – As businesses are classified according to the type of work they do, when a business changes what it does, the premium rate will also vary. This classification helps in defining which type of risks poses more risk to employees, and therefore, if there is a change in business classification, the new premium code may apply, which can mean a higher code as well.
- Cost of medical services – Workmen compensation insurance policy is all about taking care of injured workers at work. Here, medical services play a crucial Been to the doctor lately? It’s costly! And the cost of medical expenses is the major driving forces behind the high rise in premium. How insurance claims are handled, medical attention is given and lost wages are paid, all these can play an important role in the overall cost of a workmen compensation insurance premium and are reflected in the premium rates.
- Additional coverage – Though, it doesn’t change premium rates every year, if the company opts for extra covers then that will revise the premium rates. There are various extra covers like coverage for contractual employees, tariff rate on the total contract amount, etc.; which a company can opt for to expand the coverage If the company opts for these extra coverages, it will be revised premium rates.
- Cancellation of some covers – Taking the above discussion forward, if the company opts out of certain additional cover, it will revise the premium structure.
- Claim experience – The experience modification factor, often known as the experience mod or mod factor, helps in deciding the premium rates. To calculate the company’s mod factor, the insurer considers the company’s claim experience as against the experience of other employees of the similar business type and size. It is feasible to control your experience mod by having good accident-prevention programs and aggressive return-to-work programmes which will keep claims only up to medical levels and fewer claims will come up to cover the loss of income.
J.S Associates, founded by Late Jyoti Deshmukh in the year 2009, is one among the most established companies in India, operating in wide fields of electrical and metallurgical engineering services. Over the ensuing years, it has evolved as a leading company offering value-added products and services in diverse areas like power transmission, petroleum specialists and telecom cables.
Since its inception, the company’s workforce has doubled from 200 to 400 and so the premium of its workmen’s compensation insurance policy which it bought in 2010. In 2011, one of its workers lost his four fingers of the right hand when his gloves caught between the machine. The insurance policy offered legal liability coverage to J.S Associates by compensating the grieved party.
In addition to the insurance, J.S Associates is committed to offering a safe working atmosphere to protect the health and ensure the safety of employees. The company has created an infrastructure and established mechanisms to protect employees and the assets they work with by complying with international quality standards. Further, the concept of safety is reinforced among employees through different mediums like periodic training, emergency mock drills, safety campaigns, periodic inspection, etc.
All these safety measures have not only lowered the incidents of accidents in the company, but also help in getting lower workmen compensation insurance premium rates. Considering the number of safety measures adopted by the company, the insurer has also cut the premium of its workers’ insurance policy.
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