Workers compensation is a required coverage for businesses throughout the state of Michigan. According to state law, an employee who suffers an injury that leaves them totally incapacitated is generally entitled to 80% of their average weekly wage. Thayer-Innes Insurance Agency and Freeman Bunting Insurance Agency partner with multiple carriers to bring you workers compensation solutions that help both your business and your employees in the event of a work-related injury or illness. In addition to covering a portion of the workers’ income, this coverage will help with:
- Hospital and physician bills
- Medicine
- Physical therapy
- Other recovery-related expenses
Death benefits are also paid to surviving dependent(s) and up to $6,000 in funeral expenses if an employee dies from a work-related injury or illness under Michigan law.
How Your Workers Comp Premium is Determined
There are three factors that determine the premiums for workers’ compensation: job classifications for each employee, the employer’s payroll size and the claims experience of your company. Each state has its own class codes for each job duty within a business and each industry that makes up the business. Employees are classified, but businesses do not classify all employees the same. For example, a construction company would typically have construction workers, management, and administrative employees—just to name a few. The premium rate is calculated at per $100 dollars of payroll and is based on each class code.
An experience modification factor (ex-mod) is then applied to the workers’ compensation premium. The ex-mod is a number used by insurance companies to gauge both past cost of injuries and future chances of risk. The lower the ex-mod of your business, the lower your workers compensation insurance premiums will be. For example, a company with an ex-mod of 90 could see a 10% savings, whereas one with 100 will more than likely be calculated at the base rate. Employers with higher than 100 will see a larger premium as they have had workers comp claims greater than the average.
Keeping your workers compensation premiums in line involves having a strong safety culture throughout the company and a program in place that helps eliminate hazards and prevents injuries. It’s also critical to report claims immediately when they do happen so that employers get the medical treatment they need and back on the job as soon as they are able.