What Factors Determine Workers Compensation Costs?

Posted on: January 27, 2015 by NSMWorkComp

What Factors Determine Workers Compensation Costs?

Staffing agencies have an interesting challenge when determining their insurance needs. Not only do staffing agency managers have to worry about financially protecting themselves, but also their property, their employees, and the temporary staffers that they recruit out to their clients. The rules in place for their coverages may differ from the rules of traditional employers. Nevertheless, to understand what factors determine workers compensation costs for a staffing agency, it may be helpful to first understand what a traditional employer would typically expect.

Traditional employers, for insurance purposes, are split into groups according to what kind of work they do. The reason for this classification is to determine what type of work will present more risk to the employees performing their given tasks. Just as a staffing agency would have different classifications due to the fact that they may recruit out to many different industries, oftentimes even traditional employers will have different classifications as well. This is because a receptionist, for example, would have understandably less risks than a delivery driver for the same company.

Payroll is another factor than contributes to workers compensation costs; this is actually the basis for an employer’s workers compensation premium. The last, but not least important, factor is the employers experience modifier, often referred to as their MOD. This is a numeric representation of the company’s claim experience. For a staffing agency, this could change depending on the type of clients they bring on. For example, a staffing agency that has primarily administrative clients would likely have a much smaller claims history than a staffing agency that has primarily construction clients.

For more specific information about your Workers Compensation policy or your Staffing Agency Workers Compensation needs, please contact your NSM Staffing Lines or AllComp insurance advisor. NSM Insurance Group offers two exclusive Workers’ Compensation programs: Staffing Lines and AllComp Solutions. Our Staffing Lines program is designed for temporary and permanent placement, outplacement and executive recruiting firms. To learn more about our services, please contact us today at (855) 661-0627.

Posted in: Staffing Agency Workers Compensation