Workers Compensation Insurance can feel like one of those necessary evils at times. If you are like most business owners, cost is a big concern in selecting a worker’s compensation program. One way to keep cost as low as possible in Georgia is through self-insuring the first $2,500 of each worker’s comp injury. In this case, self-insurance is known as a deductible. Why $2,500? Because in Georgia if you have a worker’s comp deducible any claim under that deductible is not reported on your Experience Mod Rating or “EMR”. $2,500 is the maximum amount of any claim that will not be reported to NCCI (the people that calculate the EMR). There are reasons to take higher deductibles than $2,500 but we will save that for a different article.
I am sure this begs the question… What is in it for me? Glad you asked. In exchange for taking a deductible, insurance companies are willing to discount your insurance. In exchange for the $2,500 deducible mentioned, you can expect to receive between 6% and 8% in discounts on your worker’s comp insurance premium.
The second thing a deducible does is pave the way to a lower Experience Mod Rating. If you are a contractor, you know how important this is. A small claim can mean the difference between getting a job and losing a job. It can even be the difference in getting paid for a completed job or not. Some general contractors even make a copy of your Experience Mod Rating part of their bid package. Lastly, have you ever thought about selling your business? A copy of your Experience Mod Rating is required for that too.
In conclusion, if you are a Georgia business owner and you have never been offered a deducible on your workers compensation, ask for one. Ask for $2,500. Remember, you should still file every claim on every injured employee. The insurance company will adjust the claim and bill you back for the portion under $2,500.
For questions or comments:
Josh Gurley, CIC CWCA