What the Application Asks and Why
Buying workers' compensation insurance online is straightforward, but it's important to understand what the application asks and why. Each question helps insurers assess risk and determine your premium. This guide walks through the typical information requested during the process and explains the reasoning behind it.
By knowing what's expected, you can prepare the necessary details in advance, making the quoting process faster and more accurate. You'll also understand why each question is necessary, helping you provide honest and complete answers.
Basic Business Information
The application will begin by asking for basic details about your business. This includes the legal name, address, and type of business structure (e.g., sole proprietorship, LLC, corporation). These details are essential for identifying your business and ensuring the policy is tailored correctly.
You'll also be asked about your primary industry or trade. This helps determine the risk profile associated with your business. For example, a construction company will have different risk factors than a retail store. This information helps carriers group your business with others in similar industries.
For more background on how insurance is tailored to your business, read our buying guides.
Employee Information
Workers' compensation is designed to protect employees who suffer work-related injuries or illnesses. As such, the application will ask about the number of employees you have. This includes both full-time and part-time workers. In some states, independent contractors may also be considered for coverage, depending on your state's rules and how they're classified.
Some states also ask about employee age ranges and gender, as these factors can influence injury statistics and risk assessments. However, not all states require this information, and it varies by carrier and jurisdiction.
Job Classifications and Class Codes
Workers' compensation uses job classifications to determine the premium for each type of work your employees perform. These classifications are assigned a class code, which is used to calculate the rate. For example, office clerks and construction workers are assigned different class codes due to the differing levels of risk involved in their jobs.
Most states use the National Council on Compensation Insurance (NCCI) class code system. However, states like California, New York, and Texas use their own rating bureaus (e.g., the WCIRB in California). The class code is specific to workers' compensation and is used to determine the base rate for each job classification.
For more on how class codes work, see how the marketplace works.
Owner Inclusion Election
You may be asked whether you want to include yourself as an employee under the workers' compensation policy. This is called an owner inclusion election. If you choose to include yourself, your premium will reflect the risk associated with your role in the business. If you exclude yourself, you won't be covered under the policy for work-related injuries. This decision is optional and depends on your individual situation and risk tolerance.
Wage Information
Employers are typically asked to provide the average wages of their employees. This helps insurers calculate the total premium based on the potential cost of claims. In some cases, the average wage is combined with the number of employees and the class code to determine the final rate. Accurate wage data is important to ensure a fair and accurate quote.
Worksite Details
Employers are also asked about the location(s) where work is performed. This includes the primary worksite, as well as any satellite offices or job sites. If your business operates in multiple locations, you'll need to provide each address. Some states also ask whether employees work from home, travel, or operate mobile equipment, as these factors can impact risk levels.
Claims History
Some applications may ask about your business's past workers' compensation claims. This information helps insurers assess your risk profile and determine your premium. If your business has had previous claims, it may affect the cost of your coverage. However, not all applications ask for this information, and it may vary by carrier.
Next Steps After Submitting Your Application
Once you submit the application, it is sent to the carriers in the marketplace. They will review the details you've provided and calculate a quote based on your business's risk profile and the data you've shared. You'll receive a number of quotes that you can compare side by side, and once you choose a carrier, the coverage can be bound and paid for directly online.
Ready to start your quote? Get started now.
