New Jan. 1 Workers Comp Requirement

Effective Jan. 1, 2012, insurance carriers must disclose their short rate cancellation penalty when providing a quote if they apply a penalty for mid-term cancellation of the policy. Most workers’ compensation policies are issued for a one year period with administration costs spread over the term of the policy. If a policy is cancelled mid-year, the carrier has not yet collected enough money to cover administrative expenses and a short rate cancellation fee is charged.  

This fee varies by company and in some cases can be significant especially on policies in effect for only a few months. Companies should be careful to consider this fee when selecting workers’ compensation coverage. Your insurance broker should review this item with you when evaluating workers’ compensation quotes.

Western Growers Insurance Services likes to consider all key elements when making recommendations for coverage including short rate fees, coverage issues, claims management and services provided by the carriers. If you would like WGIS to review any of your business or personal insurance needs, please contact us.