Most business owners receive their workers comp policy, file it away, and never look at it again until something goes wrong. That is a mistake. Understanding the key sections of your policy helps you catch errors, avoid surprises at audit, and know exactly what you are covered for.
The Declarations Page
The declarations page is the summary at the front of your policy. It shows your policy period, premium, carrier name, covered locations, and the class codes and rates applied to your payroll. Review this page first and check that your business name, address, effective dates, and estimated payroll are all correct. Errors on the declarations page can create problems at audit.
Class Codes and Rates
The declarations page lists every class code applied to your policy along with the corresponding rate per $100 of payroll. Review these carefully. If a class code does not match the actual work your employees perform, contact your agent immediately. Incorrect class codes result in either overpayment or unexpected audit bills.
The Experience Modifier
Your experience modifier appears on the declarations page as a multiplier applied to your premium. A mod of 1.0 is average. Below 1.0 is favorable. Above 1.0 means your claims history has pushed your premium up. If your mod seems higher than expected, ask your agent to request the experience mod worksheet from the rating bureau to verify the calculation.
Exclusions and Limitations
Workers comp policies have fewer exclusions than most other coverage types, but some important ones exist. Injuries caused by employee intoxication, intentional self-harm, or conduct outside the scope of employment are typically excluded. Review the exclusions section so you know what circumstances fall outside your coverage.
Get a Policy Review from Comp Matters Inc.
Comp Matters Inc. reviews workers comp policies for East Coast businesses at no charge. Call (631) 248-2500 and we will walk through your current policy and identify anything that looks off.
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