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How To Buy Oklahoma Workers Compensation Coverage

By October 14, 2019October 6th, 2020Insurance

Injured workerSo, you think you need Oklahoma Work Comp. Workers compensation is insurance that pays for injuries an employee may suffer on the job. It will also pay for illnesses, disability, and deaths that may occur as a result of on the job activities. It can also provide defense coverage for the business if a lawsuit occurs from an employee due to said injury.

Who is Required to Have Workers’ Comp Insurance?

Oklahoma business has just one part-time or full-time employee, you’re generally required to carry workers’ compensation insurance. There are, however, some exceptions, such as:

  • household or domestic employees where total annual payroll is less $10,000
  • agricultural or horticultural workers where total annual payroll is less than $100,000
  • employees working for an employer who is related by blood or marriage and who has five or fewer total employees; and
  • most federal government or other employees who are covered by another form of workers’ compensation.

In addition, many business owners, such as sole proprietors, members of an LLC who own at least 10% of the company, and stockholder-employees of a corporation who own at least 10% of the corporation stock are not required to be covered by workers’ compensation insurance.

Where Do I Start To Get A Work Comp Quote?

In order to get started there will be a little bit of information that is needed. Any agent or company that is looking at quoting your business will need this information.

  • Business Name
  • Business Address/Mailing Address
  • Tax ID Number also known as FEIN if you are an entity
  • If you are operating as an Individual entity then your Social Security number will be required
  • Type of business being performed
  • # of Employees
  • Amount of Payroll for each different job (Not including owner payroll)
    • If you have one office person and one salesperson then a workers compensation policy will classify each job type with a different class code and different rate of charge.
  • History of Previous Work Comp losses.
  • Information on Subcontractor use
  • Decision whether to include owners that own more than 10% or not to include them

What If I’m A New Business And Don’t Know My Exact Payroll Yet?

This can be a difficult item to figure out. Typically, the first year may be a little hard to guesstimate, but having a knowledgeable, commercial insurance agent can help. Sit down or call them up and they should walk you through a plan of action.

What Companies Will Write My Business?

Depending in the type of industry, loss history, credit or financial score, and years in business will delegate what insurance company is willing to write you.

Many top tier companies won’t write a brand-new business unless they have experience. Some industries, such as roofers, will leave you with only one option for private company coverage which is the state fund; in Oklahoma the state fund is Compsource Mutual Insurance Company.

Other options for workers compensation can include self insurance.

I Have A Quote. Now What?

Once you have a quote there will probably a couple of next steps.

Review the quote. Double check that the payroll amounts listed on the quote are the correct amounts. Low-balling payroll figures upfront an save you a little bit of money upfront but can screw you on the back end. Why you ask? More on that below.

Once you review everything and it looks like you want, get with your agent. Each company may require different items in order to put the policy in place. Usually, they all include forms to sign, but when it comes to setting up billing plans this can vary.

Workers Compensation Billing Methods

Oklahoma workers compensation insurance companies typically have two methods in which they can bill you for your policy.

Monthly Reporting Form- This can be called by many different names, but the gist is the same. Each month a form (can be paper or online) must be submitted from your company with the payroll amounts that were paid over the past month or week(s.) The company then will rate the bill based only on the actual payroll you paid. They may require a down-payment or rolling deposit to put the policy in place. This is a great option to control workers compensation audits since the monthly premium will always be figured upon actual payroll figures.

Set Monthly Bill- This is going to be the typical billing that you see from insurance companies. Based off those estimated payroll figures used to quote, the company will then send monthly bills that will typically be the same consistent amount. This is a great option if just want a steady bill throughout the year. A workers compensation audit will be completed at the year and will amend any variance in payroll figures.

What Is A Workers Compensation Audit?

Upon the completion of a policy period (which typically lasts for 12 months) an audit will occur that will look back over that policy period. Workers compensation audits, unlike General Liability audits, occur every year.

An audit is a method insurance companies use to verify payroll figures are correct and that individuals working for the company in an employee capacity were included.

The auditor may require various items to verify payroll includes 941’s, 944’s, W-2’s, payroll records, prior tax information, 10-99’s, subcontractor proof of insurance, and ownership information. Once they receive all the information, they will line up with the amount of payroll estimated or reported. If the payroll is more, it will result in an additional premium. If they payroll amount is less, most companies will give you a refund. Those cases are always our favorite .

Commercial insurance can be confusing, but with the right insurance agency on your side, they can simplify it.

To get a quote just text or call our office at 405-373-2977 or go online to get a Oklahoma workers compensation quote.