by Drew Roberts, CPCU, ARM
Many lawn care and landscaping businesses have asked us about a standard premium discount that our insurance carriers apply to their workers’ compensation policies. In the premium summary section of the policy documents, this discount will show up for insureds that pay over 5,000 dollars a year for workers comp insurance. It will be marked as a percentage and that percentage will change as your payroll changes. This is a standard discount in Florida and is used regardless of the insurance carrier on guaranteed cost policies (not retrospective rating policies). It can be used with dividends and other discounts. Here is how this standard discount is computed:
The standard discount is tiered. There is not a discount on the first 5,000 dollars of premium and the discount is applied to only the premium above that amount. Below is a chart with the current discount percentages applied to each level of premium.
|Standard Premium Discount|
|Discount by Insurance Carrier Type|
|Premium From:||Stock Co.||Non-Stock Co.|
|$5,000 - $100,0000||10.9%||3.5%|
|$100,0000 - $500,000||12.6%||5.0%|
The principle behind applying a premium discount to larger workers’ compensation policies is that expenses of handling compensation on a risk are proportionately less, as a percentage of premium, as the risk becomes larger. Typically, agency commissions are also reduced on larger policies. These discounts only apply in the state of Florida and although other states may use a similar formula, please check with the workers’ compensation insurance division of your home state.
If you have any questions regarding premium discounts for your lawn care, landscaping, or tree trimming business, please do not hesitate to contact me or one of the other insruance agents at BearWise Landscapers. If you would like a comparative quote on your workers’ compensation policy, you may request it by calling our office or completing our online quote request form.