Some states allow an employer to self-insure—a process that typically requires the business to maintain a hefty cash reserve earmarked for workers’ compensation claims. Usually, this isn’t practical for small businesses. Most small businesses buy insurance through a state fund or from a private insurance carrier.
If private insurance is an option in your state, discuss it with an insurance agent or broker who handles the basic insurance for your business. Often you save money on premiums by coordinating workers’ compensation coverage with property damage and public liability insurance. A good agent or broker may be able to explain the mechanics of a state fund where that’s an option or is required.
Note: For detailed guidance on workers’ compensation insurance audits, see Comp Control: The Secrets of Reducing Workers’ Compensation Costs, by Edward J. Priz (Oasis Press), and Slash Your Workers’ Comp Costs: How to Cut Premiums Up to 35%—And Maintain a Productive and Safe Workplace, by Thomas Lundberg (Amacom).