How Much Does Workers' Comp Insurance Cost in Ohio?

To run a successful business, workers' compensation is crucial. It prevents financial and legal issues from arising in case of a work-related injury. This type of insurance provides coverage for medical expenses, lost wages, and disability benefits for workers injured at the workplace while securing the employer from the financial consequences associated with lawsuits.

Although workers' comp is incredibly important for companies, most business owners struggle to determine how insurers calculate workers' compensation premiums. Understanding the formulas involved and the various factors that affect policy costs can help employers save money by prioritizing workplace safety.

Larrimer & Larrimer, LLC is a reputable law firm that has been helping injured workers secure maximum compensation through the workers' comp system since 1929. Our experienced attorneys have created this guide for small business owners to help them understand the factors affecting premiums, enabling them to make decisions that improve safety at the workplace and reduce insurance expenditures. Our team is able to answer questions like Are contractors covered by workers' compensation?

How Much Does Workers' Comp Insurance Cost for Small Business Owners?

Insureon, an independent marketplace for online insurance delivery, reported that small business owners paid $45 per month or $542 annually for coverage.

On the other hand, employers working with The Hartford paid $86 monthly. There isn't a set rate for premiums across America, as the pricing depends on many variables.

While a number of factors affect the cost of workers' comp coverage, a 2021 report by the National Academy of Social Insurance showed that Ohio employers paid, on average, $0.74 for every $100 of payroll in 2019. These figures can vary from one company to another.

What Are the Factors That Affect Workers' Compensation Insurance Cost in Ohio?

There are many factors that insurance companies take into consideration when determining workers' compensation insurance costs, some of which include the following:

Nature of Business or Type of Industry

Insurers classify each job title or profession by specific codes, which help them decide the risk levels of the different roles. The premium an employer pays for workers' compensation insurance depends on the type of work the employee does.

Typically, jobs with a higher risk of accidents or injuries may have greater premiums. On the other hand, workers' compensation insurance costs employers much less for employees who have desk jobs and perform very little physical work.

Number of Employees

Most insurance companies calculate premiums based on the company's total payroll. The higher the number of employees working for a business, the greater the workers' comp insurance costs.

For example, a company with five workers will pay a lower premium than an employer with 100 employees due to the sheer difference in the total payroll.

Businesses need to understand that the cost of workers' compensation can change over time. As a company expands and employs more, the risk of accidents or work-related injuries could rise, resulting in higher premiums.

Business Location

There are different workers' compensation laws across every state, where a rating bureau sets a baseline rate that's used to calculate the premium on a workers' compensation insurance policy.

In Ohio, things are a bit different. The law requires businesses to purchase workers' comp insurance from the Ohio Bureau of Workers' Compensation (BWC) instead of private insurance companies.

While this improves accessibility to coverages, even for tough-to-insure professions, it can be difficult for companies to compare quotes to get the best price due to the lack of competition.

Claims History

Insurers are more likely to charge higher in case of greater risks. If a company has made several claims in the past, this could affect its premiums on workers' compensation coverage.

Safety and Training

A business with an excellent safety track record may face lower insurance costs than those with poor standards. Ongoing training can also reduce workers' comp insurance premiums, as they can help decrease the risks of accidents.

How Are Workers' Compensation Costs Calculated in Ohio?

Since there are several factors that can affect workers' compensation costs, calculating premiums can be challenging for the state insurer. However, it has a unique formula that considers the different elements to determine insurance cost.

BWC bases the premium on the rates established across the different job classifications, which vary according to the risk of injury. For example, a professional with a desk job will have a lower workers' comp insurance cost than a window cleaner.

The state insurer records the details of an employer's claims history on the 30th of September each year. After BWC summarizes an employer's total payroll in each manual classification, it is used to determine the base rate per $100 of payroll.

A key thing to remember is that the base rate varies according to the company's relationship with Ohio BWC. Employers maintaining workers' comp coverage for a long time will have an adjusted rate based on a four-year claims history.

When calculating premiums for the coming workers' comp policy period, BWC uses an experience-rating procedure to estimate the employer's future costs. The state insurer uses a mathematical formula to differentiate between the employer's experience rating and the industry average. This incentivizes companies to improve workplace safety to reduce claims.

How Can Ohio Employers Reduce Their Workers' Comp Insurance Premiums?

There are several ways employers in Ohio can reduce their workers' compensation premium, and these include the following:

• Training the employees can reduce the risk of accidents at the workplace, which can drive down workers' compensation insurance costs.

• Raising the deductibles before the state insurer covers a claim can help lower an employer's insurance rate.

• Focusing on workplace safety can identify and mitigate hazards, reducing the risk of accidents, which can lower the number of claims filed. This can bring down the workers' compensation insurance premiums.

• Bundling different insurance policies can help employers save money on workers' compensation.

  
  

Workers' Compensation Insurance Benefits Can Be Challenging to Obtain!

While most employers must carry workers' compensation insurance to cover injured employees in case of workplace accidents, affected parties often struggle to receive cash benefits. This is because insurers work in the best interest of their shareholders, which means they are more likely to reduce or deny claims as payouts impact their bottom line.

Fortunately, injured workers can work with experienced workers' compensation attorneys to build a strong case or file an appeal, increasing their chances of making a financial recovery. For more information, Columbus workers comp lawyers may be able to help.

Struggling to Receive Workers' Compensation Benefits in Ohio? Larrimer & Larrimer, LLC Can Help Protect the Rights of Injured Workers!

If you've suffered workplace injuries in Columbus, Ohio, call us to schedule a free consultation with a skilled workers' compensation attorney to discuss your legal options!