Selma, AL, has a local population of over 18,370 residents. If you own a business in this small town, you may need workers' compensation insurance. Coverage is state mandated once you reach a certain employee count.
Fortunately, an independent insurance agent can help you find a policy for an affordable price. They know how to navigate regulated insurance and can get your business a policy that fits. Connect with a local expert to get started.
What Are the Basics of Workers' Compensation Laws in Selma, AL?
In Selma, AL, workers' compensation is required when you have five or more full- or part-time employees. This policy will pay for lost wages and medical expenses of an employee injured or ill on the job. Whether your team member has a slip and fall or ingests a substance that makes them sick, you'll be responsible.
Even though coverage isn't mandatory until you reach five employees, you may want to consider it sooner. Whether you are part of the 312.01 million dollars in benefits paid by self-insurance or have your coverage through a local provider, you'll want protection. When a loss occurs, it could take years to close. If you don't have the right policy in place, you might face financial ruin.
What Does Workers' Compensation Cover in Selma, AL?
A workers' compensation claim can go in numerous directions, sometimes taking a turn for the worst. Fortunately, if you have adequate protection, your policy will bear the brunt of the expense. Check out what a workers' compensation policy can cover:
- Disability insurance
- The death benefit to a surviving family
- Lost wages
- Medical expenses
Workers' compensation is similar to auto insurance and needs to meet certain state regulations. It should have coverage that insures your business and staff as well as Alabama mandates. Workers' compensation can be tricky, and it may be best to get a professional's opinion.
Who Does Workers' Compensation Cover in Selma, AL?
Workers' compensation insurance will cover more people than you may think. Anyone you use to complete a job for your business could technically file a claim against your policy. Take a look at some of the people your workers' compensation policy can insure:
- W-2 employees
- Non-exempt owners, partners, members, and officers
- 1099 contractors
To avoid having a loss due to an uninsured 1099 contractor, you'll need to set parameters in place. When you hire a 1099 contractor to complete a task, be sure they have adequate coverage. Require proof of insurance, so if they get injured or ill on your job, they have their own policy to fall back on.
To protect your workers' compensation, general liability, and business auto policies, get evidence of coverage from all your non-W-2 employees.
How Much Does Selma, AL, Workers' Compensation Cost?
Unlike other business policy premiums, your workers' compensation insurance costs are figured a lot differently. The rates per every $100 in payroll in Selma, AL, varies. They depend on a high and low base per job type. Where your premium falls within that range will be decided by the carrier. The lowest base rate in Alabama starts at $0.15 for the least risky task and goes up to $22.80. Check out some items the companies consider when deciding your costs:
- Classification codes: These are determined by how dangerous your job duty is. The more risk involved with your task, the more premiums you'll pay.
- Loss history: Your loss history will affect your premiums. The frequency and longevity of your claims, the more expensive your costs will be.
- Experience level: The longer you have workers' compensation coverage, the better policy and rates you will get.
Alabama base rate examples
The National Council of Compensation Insurance (NCCI) sets the base cost per job classification. Each class code has a low rate and a high rate. The carriers decide which to assign within that range. Check out some examples of base rate ranges per $100 of employer payroll:
- 8742 Sales professional - $0.25 low rate / $0.62 high rate
- 8810 Clerical-office employees - $0.15 low rate / $0.27 high rate
- 5022 Masonry construction - $5.17 low rate / $12.79 high rate
- 5102 Door and window installers - $3.58 low rate / $8.85 high rate
- 5183 plumbing contractors - $2.04 low rate / $5.04 high rate
- 5190 Electrical work-electrician - $2.18 low rate / $5.39 high rate
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Most Common Workers' Compensation Claims in Alabama
There have been 643.48 million dollars in workers' compensation benefits paid by state and federal programs in Alabama. The most common injuries reported are due to lacerations and slips and falls. There are many ways to avoid these instances as an employer. Take a look at the top items that will help reduce injury or illness on the job site:
- Hold regular safety meetings with staff
- Assign a safety officer to keep guidelines monitored and abided by
- Be proactive in workplace safety measures to avoid injury or illness
- Have posted safety protocols for all to see and follow
- Have a risk consultant review your business insurance policies and safety measures taken
Where Can You Purchase Coverage in Selma, AL?
Selma, AL, has a private workers' compensation market. Numerous licensed agents are approved to sell within these private markets. When you consult with a local adviser, they can maneuver the state-regulated sites and carriers, so you don't have to. A lot of times they will do a full review of all your business policies including general liability, health insurance, commercial auto insurance, and more.
Two other options you'll have is a group self-insurance fund or the assigned risk pool. By group self-insuring, it means you meet specific financial criteria. You'll then be allowed to pool your resources with a group of employers to offer Alabama workers' compensation.
If your company is new or doesn't have the experience needed, you'll have to take what you can get. When two or more standard markets have denied coverage, you'll have to go through the more expensive assigned risk pool. It won't be pretty, but it'll be coverage nonetheless.
How experience modification rating affects your premium in Alabama
In Alabama, if your workers' compensation premium is $10,000 in two years, you'll have an Experience Modification Factor (X-mod). An X-mod lets Selma underwriters know how your loss history stacks up. It works like this:
- When you have an X-mod of 1.0, it doesn't affect your premium. Every employer will start with a 1.0 X-mod, and it's the baseline.
- When you have an X-mod greater than 1.0, it is considered a debit mod. That means you had losses, and your premiums will increase.
- When you have an X-mod less than 1.0, it is the credit mod. This is the best spot because your loss history was better than expected, and you get lower premiums because of it.
How a Selma, AL, Independent Agent Can Help
Workers' compensation insurance can be confusing if you're not a licensed professional. To avoid penalties and federal back taxes, you should get an expert. An independent insurance agent can help your company find a policy that fits.
Since they have multiple markets, you'll get the best coverage and premiums in town. An independent agent works on your behalf at no cost so that you can save. Connect with a local adviser on TrustedChoice.com to begin.
TrustedChoice.com Article | Reviewed by Jeffrey Green
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