Colorado Workers Compensation Premium Rates

Business Owners will soon Celebrate Because of a Decrease in Colorado Workers Compensation Premium Rates 

Colorado Workers Compensation Premium Rates will be decreasing in 2019 by an average rate of more than 10%.  This impact will go in to effect on January 1, 2019 and will be the fourth straight year business owners have enjoyed a decrease in the amount they pay for workers compensation insurance premiums.

Views like this High Mountain Lake contribute to the decrease in Colorado Workers Compensation Premium Rates

The Colorado Division of Insurance previously approved a recommended decrease of 16.7% based on recommendations from the National Council on Compensation Insurance (NCCI).  The Colorado State Provider, Pinnacol, said its rate change is different because it reflects longer-term underlying loss and expense trends.  They are moving forward with a smaller annual decrease in order to minimize volatility in the short term and create stability for business owners over a longer period of time.

As of 2017 rates in Colorado were 19 % lower than the national average. After two years of increased savings, the state system will more than likely rank even better in 2019.  Oregon Workers Compensation Premium Rate Ranking will come out in March of 2019.  This is a study that comes out every two years. The previous rankings was listed in 2017 for the rankings from 2016.  Next March the rankings will again be listed for rates form 2018.

What Contributed to the Colorado Workers Compensation Premium Rates Decreasing for the Fourth Straight Year

The three main aspects that contributed to Colorado Workers Compensation Premium Rates declining are increased cost efficiency, favorable claims trends driven by safer workplaces and a strong Colorado economy. Pinnacoll did not move forward with the full amount of decrease recommended by the Division of Insurance and NCCI because they plan to keep the market stable and give additional savings back to its members via a dividend.  Not giving the full recommended decrease may allow Pinnacol to continue to offer a moderate decrease continually and avoid a large decrease one year followed by an increase the following year to stabilize the market. Leaders at Pinnacol believe this moderate decrease will allow the business to compete in the workers compensation system and keep rates as low as possible for all Colorado businesses.

How is Colorados’ Workers Compensation System Unique?

Colorado is not a partner with the National Council on Compensation Insurance.  Thirty-two states use NCCI to determine recommended pure premium rates for workers compensation. Four states are Monopolistic States meaning they have their own workers compensation system that does not recognize other staets when a business enters that state for any reason. The rest of the states wither have their own state provider or the use a public private partnership.  Colorado uses a public private partnership to administer the provider of last resort within the state workers compensation system. This company is call Pinnacol.  Established more than 100 years ago, Pinnacol was formed to provide some stable workers compensation coverage to businesses within the state no matter the size or anticipated risk of the business. Currently Pinnacol represents approximately 56,000 customers.


How can I Lower my Workers Compensation Insurance Premium?

Workers compensation insurance premium is often a large portion of overall property and casualty insurance costs. Many business owners look at the workers compensation premium and wonder how they can reduce the overall cost of the insurance policy. The following ideas can help reduce your costs and hopefully help make your business more profitable.

Make sure you are classified properly

Business will have a classification code determined by National Council on Compensation Insurance (NCCI) or some cases the State will have a slightly different number that is used by insurance carriers to rate workers compensation insurance premium. For Example one way to reduce your cost is to take advantage of standard exceptions to the code classification. Employees who perform clerical duties and are physically separate from manufacturing operations may be classified as clerical employees with a much lower rate. Make sure the classification for your employees is appropriate.

Monitor your loss control and safety programs

Loss Control and Safety is critical for preventing losses in the workplace. Set the expectation in your safety manual. Follow up by reminding employees of safe practices including lifting, distracted driving, and the hazard of wet floors. Scheduled safety meetings and incentive programs should be used to promote workplace safety. Decreasing losses will reduce your overall insurance costs.

Develop an effective return-to-work program 

Develop a return to work program. Having injured employees staying at home collecting workers compensation will raise your costs on premiums and also on additional labor you will need to hire while that person is out. A way to get your injured employee to return to work as soon as possible is to create a temporary position for that person. You can give them duties that are not taxing on the body so that they will still be able to recover while they are working.

Speak with your agent about adding a deductible

Evaluate the benefit of adding a deductible to your Workers’ Compensation program. A deductible provides an immediate credit to the workers compensation insurance premium calculation. Additionally, losses under the deductible will not be reported to NCCI and will cause a reduction in your experience modification. Be sure to analyze the cost of funding your deductible.

Notice if there is a pattern to workers compensation claims. Determine if certain areas of your business have fewer claims than others, and determine why the risk is lesser or greater in different areas. Reduce risk by duplicating safe behaviors and programs and eliminating risky behaviors.. Eliminate workplace hazards that have caused an employee to get sick or injured so it doesn’t happen again. Some carriers will even provide help in this area. 

Report claims ASAP

Report Claims as soon as possible! Provide medical attention quickly if an employee is injured, as prompt medical attention may reduce complications that may arise from delayed care. Complications can make workers’ compensation claims more expensive, which may increase insurance premiums.Statistics prove that losses reported 24 hours or more after the loss are more expensive than those reported promptly. Managing your Workers’ Compensation program carefully can save money and improve your bottom line.

These are just a few ideas that can help you in either keeping your premiums low or driving them down. Every business wants to be more profitable and it can be as simple as investing in work place safety that could get you started in the right direction.