3 steps to renewing workers’ comp for small business owners

One of the most important issues for small businesses is workers’ compensation insurance. You want to make sure your employees are safe and healthy on the job, but managing the paperwork and policy renewals can be challenging.

Whether you need a workers compensation exemption renewal or are renewing workers’ comp coverage, you have a chance to streamline your costs and methodology. Here’s how.

Step 1: Review your business

Your renewal process should start with a review of your business and existing workers’ comp policy. To start, ask yourself these questions:

• Have the needs of your business changed?
• Did you add or lose employees this year?
• Have your payroll or job classifications changed?

Review your business entity (did you upgrade from an independent contractor to an LLC?) and business needs.

If you plan to hire more people this year, include their salaries in your workers’ comp calculations. It’s okay if you don’t know the exact numbers—your insurer will adjust the premium based on your actual payroll.

Then, double-check your payroll and job classifications:

• Pull up the declaration page of your current policy. It will show how your workers are classified (the kinds of jobs they do) and the amount of payroll you’ve estimated for each role.
• Check the classifications carefully. Has it changed in the last year? Do you anticipate changes in the upcoming year? Let your insurer know so you get the right workers’ compensation coverage without paying more than you need to.
• Review allocated payroll. Estimated payroll plays a crucial role in workers’ comp premiums. If you’re in an industry that splits employees into different job classifications—you might own a manufacturing company that also employs office staff—make sure you’ve allocated your payroll correctly among the various kinds of jobs.

Let your small business insurance company know if you have any plans to switch up what you’re doing. Pivoting your business could put you in a different insurance classification, which will affect what you pay for workers’ comp.

Step 2: Revisit your coverage

State laws govern workers’ comp insurance for small businesses. After reviewing your business needs, make sure your policy meets state requirements.

Laws can vary, so check with your state’s division of workers’ compensation. Generally, your responsibility to provide workers’ compensation benefits depends on the number of employees, your industry, and the type of work employees perform.

For example, according to MyFloridacfo.com, workers’ compensation laws require small business owners in the construction industry in Florida to have workers’ comp if they have one or more employees. But the state requires non-construction businesses to have insurance coverage only if they have four or more employees.

Renewing workers’ comp is also an excellent opportunity to review the company you’re insured with—does it meet your needs? Are the rates affordable?

• The best workers’ comp coverage combines old-school attention to detail with streamlined online services. You should manage your policy easily, file a claim, and get your questions answered.
• Your insurer should understand different class codes or industry classifications. That way, the company can get you the right insurance policy while offering the lowest rates for your classification.
• The insurance company should keep you updated on laws that might affect your business, policy options, and premiums. Rate changes can impact your company’s bottom line, and you’ll want to prepare your finances ahead of time.

If your current insurer checks all the boxes for what you’re looking for in an insurance company, that’s great! But don’t be afraid to shop around. Buying workers’ comp online can connect you with the best combination of service, technology, and rates.

Step 3: Renew your policy

Now you’re ready to renew your coverage. If you’re doing a workers compensation exemption renewal, you’ll file an application form (sometimes called a Notice of Election to be Exempt).

The exemption application is helpful if your state doesn’t require coverage for all types of workers. For example, a small business in Florida might file a Florida workers’ compensation exemption for a corporate officer or member of a limited liability company. But keep in mind this excludes them from receiving workers’ compensation benefits.

And if you need to renew your workers’ comp policy, it’s simple to do:

• Gather your employee classification and payroll information
• Get quotes from your current insurance company and other insurers
• Compare policy options and premiums to choose the best coverage

If you’re shopping around and want a quick estimate, use our workers’ comp quick estimator tool. It will give you a ballpark figure of how much you might pay.

Renewing workers’ comp isn’t super complicated or time-consuming—but there are a few details you need to pay attention to if you want the best coverage. If you’re in a rush, get a quote from Huckleberry. You can get your proof of coverage in about 5 minutes so that you can get back to running your business.