From one-person shops to multinational giants, running a successful business requires satisfying customers and staying ahead of competitors. Under those twin pressures, it’s understandable how seemingly mundane workers’ compensation issues could escape notice. Even so, savvy CEOs continually push themselves to reexamine every business operation. A clean-sheet look at workers’ comp reveals a colorful history, overlooked cost-saving possibilities and surprising advantages for self-employed workers.
Pirates Pioneered Workers’ Comp
Severe legal penalties and the scarcity of treasure-laden galleons have largely eliminated high seas piracy as a viable business. Nonetheless, late 17th-century pirates governed their cutthroat business activities with highly sophisticated corporate articles, including a forerunner of workers’ comp. Alexandre Exquemelin’s “History of the Buccaneers of America” reported that that the loss of an arm or leg would net a crew member 500 pieces of eight. 100 pieces of eight compensated for the loss of an eye or finger.
Within decades, pirates evolved continuous disability benefits. In “The Invisible Hook: The Hidden Economics of Pirates”, Peter T. Leeson describes a pirate company that provided disabled members ongoing stipends from the ship’s public stock. Leeson notes acerbically that pirates “did so before their legitimate contemporaries achieved anything like the same.”
Premium Credits Are Available for Workers’ Comp
Captains of modern-day enterprises deal with dollars instead of doubloons and must maintain a keen eye on their workers’ comp premiums. To help hold down this expense, the District of Columbia and most states offer premium credits for participation in at least one cost-savings program. Qualifying businesses receive these credits in addition to the incentives underwriters provide for posting a superior claims record.
The programs fall into these categories:
- Drug-Free Workplaces: This premium credit is open to businesses that establish drug-testing and substance-abuse prevention programs.
- Safety: This credit usually requires filing a risk management program and demonstrating at least one year of workplace safety results.
- Contracting Classification Premium Adjustment Programs: In states where available, CCPAP compensates construction employers who pay wages above a state-determined minimum qualifying hourly wage.
Credit qualification usually requires an audit or a workplace inspection. With premium credits in the 5% range, exploring these incentives should be a high priority for eligible employers.
Sole Proprietors May Benefit From Workers’ Comp
Sole proprietors are not required to join workers’ comp programs. Still, a few situations can make voluntary participation advantageous:
- Desirable clients may insist on a sole proprietor carrying workers’ comp coverage.
- Workers’ comp benefits may offer an injured sole proprietor a cost-effective income substitute during recovery.
- Familiarity with workers’ comp reporting requirements positions a sole proprietor to hire additional help when needed.
Three centuries after pirates plied the Caribbean, navigating workers’ comp can seem as challenging as keeping a square-rigger off the reefs. Nevertheless – in any era – getting this program right is good for business.
InsureMyWorkComp is a digital brokerage that helps clients find the right workers’ compensation solution for their business needs. Unlike other online platforms, we will help you work with an agent who can provide the right solution for your risk profile. Our staff has over 50 years of workers’ compensation underwriting and sales experience, and we are confident that we will provide the support that you need. For more information or to get a quote, contact us today at (855) 340-9138.