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What Determines the Cost of New Jersey Workers’ Comp?

What Determines the Cost of New Jersey Workers' CompWhat Determines the Cost of New Jersey Workers’ Comp?

If your client has ever been faced with a New Jersey Workers’ Comp claim, they know how financially detrimental these types of claims could be to a business that is unprepared. Having the right New Jersey Workers’ Compensation policy is vital to any businesses’ insurance portfolio, however most employers are concerned about the cost of Workers’ Compensation coverage to begin with.

In order to ease their minds, it may be helpful to educate them on what exactly the determining factors are when putting a price on a policy. Since almost every business in the U.S. that has even more than 1 employee is required to have a Workers’ Compensation policy, it’s beneficial for your clients to be educated.

One of the main factors that will affect a company’s premium is their classification code; businesses will be in different groups depending on the type of work they do. This is used to determine what type of work presents more of a risk to employees performing their job duties. So for example, a construction business will understandably have more New Jersey Workers’ Compensation risks than an administrative company that primarily employs office workers.

This is not to say that there aren’t different classifications within a business; some employees may yield more risk than others. For example, a delivery driver is a lot more likely to be involved in an accident or injured on the job than a receptionist for the same company. Factors like these will also be considered when determining your client’s premium.

An employer’s MOD, or experience modifier, will also affect their New Jersey Workers’ Comp costs. The MOD is a numeric representation of a company’s claim history. It is based off of how the business compares to others in the same industry with similarly classified employees.

Whatever the cost, New Jersey Workers’ Compensation is a vital component of your client’s insurance portfolio. For more information about our Workers’ Compensation policies for various Targeted Industries, please contact Associated Specialty Insurance Agency, Inc. (ASIA) at (866) 679-7457.

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