Does Premium vary with Different Insurer Providing Workmen Compensation Insurance?
Workmen compensation is an insurance policy that provides benefits to employees who suffer injuries or illnesses as a result of their employment. In most countries, it is a statutory requirement for employers to purchase workmen compensation insurance for their employees. The employees generally wonder does premium vary with different insurer providing workmen compensation insurance.
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Does Premium vary with Different Insurer Providing Workmen Compensation Insurance?
Does Premium Vary with Different Insurer Providing Workmen Compensation Insurance?
The premium of workmen compensation policy depends on several factors. Let us discuss some factors that affect the premium in order to know does premium vary with different insurers providing workmen compensation insurance.
Several factors determine the premium for workmen compensation policy. These include:
Nature of the Work
Jobs that are considered high-risk shall have a higher premium than those that are considered low-risk. For example, a construction company will have a higher premium than an accounting firm.
Number of Employees
Companies with a larger workforce pay a higher premium than those with fewer employees.
Claims History
Companies with a history of making claims will have a higher premium than those with a clean claims record.
Industry
Different industries have different levels of risk. For example, the premium for a restaurant will be lower than that of a manufacturing company.
Location
The premium for workmen compensation policy varies by state or country. In some states or countries, the premium may be higher due to higher levels of risk.
Different Workmen Compensation Policies
There are two types of workmen compensation policies.
Guaranteed Cost Policy
It is the most common type of policy. It involves paying a fixed premium for a set period, usually a year. The premium is determined based on the factors mentioned above.
Loss Sensitive Policy
This policy involves paying a premium that is based on the number and severity of claims made by the company. If a company has a high number of claims, their premium will increase.
How Does Premium Vary with Different Insurer Providing Workmen Compensation Insurance?
The premium for workmen compensation policy varies with different policies. Guaranteed cost policies have a fixed premium that is determined based on several factors. Loss sensitive policies have a premium that is based on the number and severity of claims made by the company.
Guaranteed Cost Policy Premium
In order to understand how does premium vary with different insurer providing workmen compensation insurance, let us understand the guaranteed cost policy.
The premium for Guaranteed Cost Policy depends on various factors. The premium for this policy is calculated based on the nature of work, size of the business, claims history, location, and industry type.
The nature of work plays a crucial role in determining the premium. If the employees work in a factory that involves hazardous materials, the premium will be higher. The size of the business also plays a crucial role in determining the premium.
The claims history of the business is also an important factor. If the business has a history of making frequent claims, the premium will be higher. The location of the business is another factor that affects the premium.
If the business is located in an area that is prone to natural disasters such as earthquakes, hurricanes, etc., the premium will be higher. The industry type is also an important factor that affects the premium. Some industries are considered high-risk, and hence the premium will be higher.
Conclusion
The premium for workmen compensation insurance varies depending on several factors. These include the nature of the work, the number of employees, claims history, industry, and location. Different workmen comp policies also have different premiums. Guaranteed cost policies have a fixed premium, while loss sensitive policies have a premium that is based on the number and severity of claims made by the company. Employers should carefully consider these factors when purchasing WC policy.
+Premium varies on the basis of Occupancy, Business Activity & Coverage Type
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