Minnesota Workers’ Comp Pool Alternative

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Do you or your business have a workmans' compensation policy in Minnesota's Assigned Risk Plan?  You may be able to save money by giving us a call, regardless of your size or loss history.

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What is Workers' compensation? Workers' compensation insurance is a state required form of protection that covers work-related injuries , illness, (and/or death) expenses that include medical bills, lost wages, and treatment. Usually, but there are some exceptions depending on the state (and the law seems to change often), the coverage is valid for all work related injuries to covered employees. In return, employees usually give up the right to sue their employer, even when it's clear the employer is at fault. That doesn't mean you can't sue someone though for your pain and suffering.

Case in point, if a machine you're working on malfunctions, you may have a claim against the maker of the machinery, but you'll want to speak with an attorney to learn more about what rights you have and don't have in your given situation. If you're unable to work, you can expect to receive disability payments (often about 70% of your wages) to help you pay your bills while you recover. Once able, you may be asked to return to work under "light duty", and may forfeit some of your disability payments if you refuse to return. Again, when you have questions, it's important to speak with someone trained in the area of law you're wondering about.

For example, many contractors working in the construction trade are required to get a policy on themselves even though no payroll will be rated in the policy. Known as "if any" or "ghost" policies, these types of policies are bought because a general contractor requires a Minnesota workers' compensation policy with or without actual payroll or employees.

Another good example is a business that has experience some workers' comp claims and were dropped by their old carrier and now are buying an insurance policy in the assigned risk plan. Even businesses with high MOD ratings can often save money if the agent knows what workers' comp insurance carriers have an appetite for your type of business and/or loss history.

Even if you can't save much money, having a policy outside of the assigned risk plan can have other benefits. According to the Minnesota Workers' Compensation Assigned Risk plan website, agents are not authorized to issue workers' comp certificates, so when you need a certificate, it may take longer than it would otherwise. That compares to Wisconsin's rules which do allow workers' comp agents working with pool policies to create certificates for insureds if the carrier gives permission.  Also, often discounts are gained when you combine workers' comp insurance and your general liability policy for your general liability insurance policy.

Pay-as-you-go is often a viable option for employees with premiums over $10,000. 1 Reason Insurance has several workers' comp carriers that allow employers to pay as payroll is generated, and not make large deposit payments that can take a bite out of your cash-flow.

And the Minnesota Assigned Risk Plan wants you to leave the pool and get a policy in the voluntary market. Minnesota provides a list to agents called the "depopulation report" in an attempt to encourage agents to contact employers to get them to leave the pool. 

All rates are subject to change, but what rarely changes is that on almost any given class of worker, rates are lower outside of the Minnesota WC Pool. Today, as I write this post, I reached out to a business that has employees with class code 1803, stone cutting and polishing. The MN pool charges over $11 per $100 in payroll, or above 11% of payroll. Another carrier offers essentially the same policy for less than $9 per $100 in payroll, or less than 9%. That's a full 20+ percent discount just for leaving the pool and receiving better service. Lower cost + better service = a better deal for the employer.

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