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Workers' comp insurance costs

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signmania

Owner
We are a "commercial" sign shop vs full-service. We print & cut vinyl, letter and do partial wraps on vehicles, real estate/site signs (no installation), magnetics, banners, window lettering, etc. No bucket trucks, no electric (we'll reletter a plastic face if they bring it in, but we don't remove/reinstall them), no digging holes, no painting. We have always had trouble when audited with being put in a high rate class (NCCI) code--printing (offset, etc), painting, sign installations (with heavy equipment), etc. Now they have a class for us--9501.

Our rates have gone up tremendously. They don't include the fact (we're a 2 person shop mostly) that a lot of time is bookkeeping or meeting with clients. They include driving (which we do little of). In 28 years the only injuries have been paper cuts or pokes with an X-Acto blade (OK, I broke my nose playing with a client's Segway, but I didn't turn in a claim). Our biggest risk is a car accident.

Anyone have problems with workers' comp insurance rates? I'm taking myself off coverage to save money.
 
A

AKwrapguy

New Member
signmania said:
We are a "commercial" sign shop vs full-service. We print & cut vinyl, letter and do partial wraps on vehicles, real estate/site signs (no installation), magnetics, banners, window lettering, etc. No bucket trucks, no electric (we'll reletter a plastic face if they bring it in, but we don't remove/reinstall them), no digging holes, no painting. We have always had trouble when audited with being put in a high rate class (NCCI) code--printing (offset, etc), painting, sign installations (with heavy equipment), etc. Now they have a class for us--9501.

Our rates have gone up tremendously. They don't include the fact (we're a 2 person shop mostly) that a lot of time is bookkeeping or meeting with clients. They include driving (which we do little of). In 28 years the only injuries have been paper cuts or pokes with an X-Acto blade (OK, I broke my nose playing with a client's Segway, but I didn't turn in a claim). Our biggest risk is a car accident.

Anyone have problems with workers' comp insurance rates? I'm taking myself off coverage to save money.
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I'm not sure what the laws are on that and if you can opt out, but maybe you're classified incorrectly. I know that some jobs or bids require you to have it if that makes a difference.
 
2B

2B

Active Member
AKwrapguy said:
I'm not sure what the laws are on that and if you can opt out, but maybe you're classified incorrectly. I know that some jobs or bids require you to have it if that makes a difference.
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we recently went through this and you need to make very certain how you are being classified, as that plays a DRASTIC impact on your insurance.
 
ams

ams

New Member
I am also in a high risk category and insurers refuse to insure me due to it. There is a two year period that you must go through without a single claim and then your premium is suppose to drop and everyone is suppose to want you. Didn't happen. Avoid Liberty Mutual they are the worst to deal with, I've had countless issues with them and once I was out of the two year term, I ran.

As 2B said, make sure you aren't in a sign installation category, that will destroy you. Be put in sign manufacturing. Make sure none of your employees are listed as "Installers". Even fabricators/manufacturers is high.
 
Texas_Signmaker

Texas_Signmaker

Very Active Signmaker
AKwrapguy said:
We're all graphics designers. Sitting comfortably and safety at our desk with ergonomic chairs, keyboards and accessories... nothing to see here.
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What about the pictures on your website of you on a bucket truck, without a harness on? (Actual conversation I had when renewing my insurance)
 
chester215

chester215

Just call me Chester.
Our classifications:
2881-$5.97/$100 Furniture assembly- wood
8810- $.24/$100 Office / Clerical
9501- $5.50/$100 Painting
9554- $23.45/$100 Sign installation- installation/repair/removal
They were supposed to 'discount' the 9554 rate but that went away after a couple of years.
Plus we are in the comp pool because they will accept almost any claim in CT if someone gets a lawyer.
The only claim i have seen rejected is because of Lyme disease.
Our experience mod has been as high as 1.63.

There is a way around high comp rates if you are a LLC and your employees are partners in the LLC in SOME states.

Back when AIG was going under, to generate some income, they changed our rate to 9554 form one with a rate of around $8/$100 and applied it to the previous years premiums.
It went all the way to the insurance commissioner who said it was legal for them to do it.
We had a rep from NCCI from Florida come to our shop and see if the change was fair.
They said yes.
We didn't pay it, they sued and settled for less than 1/2.

I like the idea of WC, just not how it is administered.
 
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fresh

New Member
we just went through this... my employee's rate is the highest, 9% of his salary. My partner is about 4% (never leaves the shop or uses a ladder), and since I'm just an office employee who never touches anything, mine is like, 0.22%
Its astronomical and you need to find someone to work with you on classifications.

But why don't we also talk about our general liability insurance? I had to redo mine this year, and my agent told me we had to be classified as AUTOMOTIVE since we install stickers on cars. That tripled our rate. Literally. So we shopped around and got a better rate and we don't post pictures on social media of us installing anything. I asked if they rate screen printers as "automotive" since they can screen print bumper stickers, which are just small versions of what we do, and the agent said "they should be rated that way." Sure buddy, sure.


EDIT:
4299 - Sign Manufacturing 3.72%
9521 - Install & Drivers 9.11%
8810 - Clerical & Office 0.22%

My workers comp is through PayChex
 
fuzzy_cam

fuzzy_cam

The Granbury Wrap & Sign Guy
I'm not too sure of the laws, but a local restaurant (here in TX) had their employees sign a letter acknowledging that the company didn't provide worker's comp, also had signs posted in the employee break area.
 
J

jimbug72

New Member
We are disputing our policy hike right now. We are a 5 person shop, half of that work force is strictly screen printing. We do very little installs and most of what we do we either sub it out or I do it with contracted help. Most of our installs are at ground level. We might do 8-12 installations per year that require a ladder/scaffolding/bucket and maybe 20-24 installations all together annually.

Now our insurance company is trying to force us to list all employees as above ground sign installers. With that plan our premiums are going to jump from approximately $3k per year to $23k! I don't think in any one given year we've even done $10,000 in installation charges!
 
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signmania

Owner
Wow, thanks for all the interesting info. As I understand it, the SIC codes are not really used much anymore. Insurance companies use NCCI (National Council on Compensation Insurance) codes, and the code for a vinyl (cut/print) shop is 9501. It includes driving and paint (of course we drive, but I don't paint unless it's a can of spray paint on a piece of plastic, and even that's rare). Each state sets a rate for each code. We had an "independent" appraiser come in for 20 minutes (never even went back to the garage or where we have a board cutter, panel saw and shear). I told him the only installs I do are decals on windows, and I don't do anything on a ladder. I won't even dig holes anymore. They put us at 100% working on signs--didn't even put us down for 10-15% clerical/cleaning/wait on customers/talk to Google about the danger of not being found online.

Twenty-eight years with no accident/injury/claim. I think I'm in the wrong business, but at least I can sleep at night.
 
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TimToad

Active Member
Thanks to everyone for their input. We've had some minor issues and have always attributed it to the typical greed that makes our system worth defending to the death like most do.

Every year, we go over all of our various insurance policies and engage our agent to either get anything incorrect fixed, or shop for a more honest company. If you have an agent, you have to lean on them to earn the commissions and residuals they earn off of you.

I keep wondering why so many of us owners or our duties are even listed on the policies. Owners cannot collect worker's comp and the only people and roles that should be listed on the policy are employees.
 
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fresh

New Member
TimToad said:
Thanks to everyone for their input. We've had some minor issues and have always attributed it to the typical greed that makes our system worth defending to the death like most do.

Every year, we go over all of our various insurance policies and engage our agent to either get anything incorrect fixed, or shop for a more honest company. If you have an agent, you have to lean on them to earn the commissions and residuals they earn off of you.

I keep wondering why so many of us owners or our duties are even listed on the policies. Owners cannot collect worker's comp and the only people and roles that should be listed on the policy are employees.
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It depends on how your business is set up. When we were an LLC, owners were not required to have it. Now that we are INC, we are required. ALSO, if you do any government (or even private) contract jobs, they may require you to have it even if the state doesn't.
 
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signmania

Owner
We are a sub-S corp, and in Iowa we have to have workers' comp if we have any employees. Owner can be covered or not. My agent (who definitely fights for me) said I would be covered (as any other employees) if I had a heart attack, stroke or an injury. I'm 67, and the way things are going I thought it wasn't a bad deal since I'm a candidate for all three.

I am taking myself off the policy to save money. I found out that the NCCI (who I thought was a quasi-government organization) is actually sponsored by insurance companies to come up with these classification codes. The fact that a lot of companies don't fit the codes very well is a plus for them. It used to be I could say 20% of my time was for bookwork and in-house sales, maybe 10% of my employee's time was for filing, cleaning and in-house sales; now it's "all-or-nothing".

Wow--"fresh" says applying decals to vehicles got him the "automotive" rate. I put decals on a door in a 20 story building; I hope they don't try and hit me with a builders' rate. I also installed decals on a Russian fighter (jet some guy in Chicago bought); I wonder if they think I'm a fighter pilot.

I'm thinking of selling my company and investing in insurance companies and big pharma.
 
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TimToad

Active Member
fresh said:
It depends on how your business is set up. When we were an LLC, owners were not required to have it. Now that we are INC, we are required. ALSO, if you do any government (or even private) contract jobs, they may require you to have it even if the state doesn't.
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signmania said:
We are a sub-S corp, and in Iowa we have to have workers' comp if we have any employees. Owner can be covered or not. My agent (who definitely fights for me) said I would be covered (as any other employees) if I had a heart attack, stroke or an injury. I'm 67, and the way things are going I thought it wasn't a bad deal since I'm a candidate for all three.

I am taking myself off the policy to save money. I found out that the NCCI (who I thought was a quasi-government organization) is actually sponsored by insurance companies to come up with these classification codes. The fact that a lot of companies don't fit the codes very well is a plus for them. It used to be I could say 20% of my time was for bookwork and in-house sales, maybe 10% of my employee's time was for filing, cleaning and in-house sales; now it's "all-or-nothing".

Wow--"fresh" says applying decals to vehicles got him the "automotive" rate. I put decals on a door in a 20 story building; I hope they don't try and hit me with a builders' rate. I also installed decals on a Russian fighter (jet some guy in Chicago bought); I wonder if they think I'm a fighter pilot.

I'm thinking of selling my company and investing in insurance companies and big pharma.
Click to expand...

If you have any mutual funds or other diversified investments, you probably already are invested in those two. At your age, more predictable investments are probably a wiser choice.
 
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