• About
  • Contact
  • Testimonials
  • Newsletter
  • More
    • Demographics & Advertising Rates
    • Terms & Conditions
Monday, March 27, 2023
No Result
View All Result
California Business Journal
  • Front Page
  • Business
  • Finance
  • People
  • Featured
  • Opinion
  • Technology
  • Law
  • News
  • Food
  • Art & Culture
  • Human Interest
  • Education
  • Insurance
  • Real Estate
  • Health & Fitness
California Business Journal
Can-I-Choose-My-Own-Doctor-after-a-Delaware-Workplace-Injury

Reimagining how workers’ compensation insurance is priced, purchased and maintained

“It’s going to erupt” — Dennis Dix, Cerity’s Chief Operating Officer

by Josh Rosen, Staff Writer, California Business Journal
A A
Share on FacebookShare on Twitter

It was only 20 years ago when consumers started buying personal insurance online — and then brands like Geico and Progressive suddenly became colossal heavyweights dominating their industry.

Now, Cerity is doing the same for worker’s compensation insurance.

“Research shows that most businesses are still buying insurance the old-fashioned way and we know that will change completely. With this recent economic downturn, and the move toward remote working, we’re seeing the momentum pick up as businesses are quickly adopting new online business platforms like ours,” says Dennis Dix, Cerity’s Chief Operating Officer.

So are small business owners ready to purchase worker’s comp insurance online too? “It’s going to erupt shortly,” says Dix, who is charged with reimagining how workers’ compensation insurance is priced, purchased, and maintained. “In insurance,” he adds, “nothing happens quickly. It took us over a year to get our regulatory approval to operate in California. So, if you want to be ready to go when the pendulum starts to swing, you have to start before buying behaviors have changed.”

Spreading rapidly across the country, Cerity is now operating in 39 cities. “The is pendulum swinging,” Dix says. “We’re addressing the issues that penalize small businesses.”

To that end, Dix highlights three points that small businesses can do lower their insurance costs. The first is switching to a “pay-as-you-go” billing method.

“A pay-as-you-go system is the best billing method for small business workers’ comp policies for a few reasons — the first of which is small business owners only have to pay premiums when they pay employees,” he says.

In the current pandemic with its past and possibly future lockdowns, a pay-as-you-go system helps businesses better manage cash flow because “business owners don’t pay premiums when the business is closed,” Dix says. “Remember, work comp is only required if your people are working. So, if they’re not working, you shouldn’t have to pay more.”

The pay-as-you-go plan binds the insurance to the payroll, and the amount that a company owes for insurance is calculated only when it is paying employees. “Businesses get tremendous benefits from this billing method — the real value here is that the business only pays the premium when they pay employees,” Dix says.

Traditional policies provide an annualized quote and are paid with installments. When PayGo policies are calculated they result in a “percentage of payroll” as the price.

–Traditional: $500,000 estimated annual payroll; $1,200/year = $100/month

–PayGo: Rate of 0.0024 ($1,200 / $500,000); 0.0024 * payroll during the pay period = amount due)

Dix’s next point: Small businesses can reduce the revenue or square footage on their liability policy as some insurance companies price liability coverage by square footage.

“If a business has temporarily closed its operations, it can remove that square footage from the policy completely, the way someone might take a car off their insurance if they know that it won’t be driven,” Dix says.

Later on, of course, the business can add the square footage back to the policy.

If a business is forecasting lower sales, its insurance carrier can incorporate the new forecast in the price of the policy.

“The upside to this option is that you can continue to operate your business ‘as-is’ but with lower revenue,” Dix says.

Lastly, Dix’s third point: Small business owners can request a payroll endorsement on their workers’ compensation policy.

ADVERTISEMENT

“Worker’s compensation is a company’s largest insurance expense,” Dix says. However, workmen compensation coverage provides injured workers the medical care they want and at the same time compensate for the portion of the income they lose. “If you’ve reduced payroll or expect you will, your insurance company can process a ‘payroll endorsement’ to the policy.”

This payroll endorsement can immediately lower the amount a business owes for the policy term. The full calculation for workers’ comp premium is fantastically confusing, yet all are based on “estimated annual payroll.” This is the amount of payroll a business expects to pay all employees within a twelve-month period.

For businesses with worker’s comp, insurance companies perform an “audit” at the end of the policy term to compare “estimate” to “actual” and true up the payments. Under certain circumstances, the insurance company may refund premium already paid. “It’s rare, yet if the operation is near the end of its policy period, has already paid the entire premium, and its new estimated annual payroll is lower, the entity overpaid, so you will have to request the refund as many carriers prefer to handle these payments at the end of the policy term.”

Copyright © 2020 California Business Journal. All Rights Reserved.

Cerity, CalBizJournal.com
Cerity, CalBizJournal.com
Cerity, CalBizJournal.com
Cerity, CalBizJournal.com
Tags: benefitsbestBusinessbusinessesCaliforniacarCeritycompanyconsumersDennisemployeesinsuranceinsurance companiesmedicalonlineonline businesspayrollregulatoryrevenuesmall businesssmall business ownersvalueworker’s compensation insurance.
ADVERTISEMENT
Josh Rosen, Staff Writer, California Business Journal

Josh Rosen, Staff Writer, California Business Journal

Josh Rosen writes for the Southern California News Group and California Business Journal. He has two Bachelor of Arts degrees in Journalism and Integrated Media & Humanities from Biola University.

Related Posts

Benefits of Hiring a Workers' Compensation Attorney
The Top Benefits of Hiring a Workers' Compensation Attorney
workers-compensation
How to appeal a workers’ compensation denial
business insurance
How health insurance can protect you against financial risks
forest fighters
Business Profile: The Greenspan Co./Adjusters International
how to sell your life insurance policy
How to sell your life insurance policy
Andy Bhushan feature photo
Smarter Data + Increased Transparency = Better Insurance
do i need life insurance
Do I Need Life Insurance?
advertisement
ADVERTISEMENT

CBJ Newsletter

Facebook Twitter LinkedIn Instagram LinkedIn

Advertise With CBJ

Contact Rick@CalBizJournal.com

CBJ Rates and Demographics

Job Postings

CEO Wanted


Requirements: BS/BA + 2yrs of Business Managing Experience

Mail Resume: Grand Life, Inc. 14647 Northam St. La Mirada, CA 90638.

$114,754/year

ADVERTISEMENT
1REALTOUR-SAN DIEGO-WEB DESIGN
Facebook Twitter LinkedIn LinkedIn Instagram Youtube
C B J   LOGO  SVG-01
  • About
  • Contact California Business Journal
  • Testimonials
  • Demographics & Advertising Rates
  • Terms & Conditions

Categories

  • Art & Culture
  • Business
  • California Hotel Listings
  • Daily Updates
  • Editor's Choice
  • Education
  • Featured
  • Finance
  • Food & Dining
  • Health & Fitness
  • Human Interest
  • Insurance
  • Law
  • Lawyers
  • Marketing
  • Medical
  • News
  • Newsletter
  • Opinion
  • People
  • Popular
  • Real Estate
  • Social Media
  • Technology
  • Uncategorized

CBJ Partner Firebrand Media

Laguna Beach Independent Newspaper
 Laguna Beach City Guide
 Newport Beach Independent Newspaper
Newport Beach Country Club Magazine
  Montage Magazine
 Omni Escapes Hotel Magazine
 Bespoke Concierge New York
 Evans Hotels
 Laguna Beach Magazine
 On The Menu Laguna Beach
 Newport Beach Magazine
Coastal Real Estate Guide (NB,LB, CDM)
Monarch Beach Resort Magazine
 Pacific Coast Magazine (SoCal)
Sea Island Life Magazine
Salamander Hotel & Resorts Magazine
 View our entire portfolio

 

Most Viewed

  • Gavel, scales of justice and law books

    Lawsuit Basics: How Much Does It Cost to Sue Someone?

    0 shares
    Share 0 Tweet 0
  • Investigation: Can TriumphFX Take Your Money?

    0 shares
    Share 0 Tweet 0
  • The Impact of Covid: Racing to Buy Second Citizenships

    3 shares
    Share 0 Tweet 0
  • What to Do When an Online Casino Refuses to Pay Out Your Winnings

    0 shares
    Share 0 Tweet 0
  • The Truth About Temu: Where Is It From?

    0 shares
    Share 0 Tweet 0
  • Top 5 Flavors On Elf Bar BC5000 Review

    0 shares
    Share 0 Tweet 0
  • NFL Paychecks: How Do NFL Players Get Paid?

    0 shares
    Share 0 Tweet 0
  • Temu’s New Shipping Policy Is A Smashing Hit For Shoppers All Over the Country

    0 shares
    Share 0 Tweet 0
  • Five Reasons Why The Government Does Not Like Bitcoin

    0 shares
    Share 0 Tweet 0
  • How to Start a Telecommunication Business: A Step-By-Step Guide

    0 shares
    Share 0 Tweet 0

Latest Articles

Can You Trust Temu on Facebook and its Referral Games and Rewards?

Can You Trust Temu on Facebook and its Referral Games and Rewards?

Shoe Packing Isn’t as Easy as You Think on Moving Day

Shoe Packing Isn’t as Easy as You Think on Moving Day

How to Prepare Your Home for a Successful Sale

How to Prepare Your Home for a Successful Sale

Is It Possible to Track Facebook Messenger Secretly?

Is It Possible to Track Facebook Messenger Secretly?

How To Date Over 60 Successfully?

How To Date Over 60 Successfully?

BioLargo’s PFAS Treatment Technology Meets EPA’s Proposed New Drinking Water Standards

BioLargo’s PFAS Treatment Technology Meets EPA’s Proposed New Drinking Water Standards

7 Factors to Consider While Picking the Right Freight Carrier for Your E-Commerce Business

7 Factors to Consider While Picking the Right Freight Carrier for Your E-Commerce Business

The Marketing Effect On Healthcare and Wellness Organizations

The Marketing Effect On Healthcare and Wellness Organizations

5 Reasons Why E-Commerce Businesses Rely So Much on Third-Party Logistics (3PL) Services

Why E-Commerce Businesses Rely So Much on Third-Party Logistics (3PL) Services

Making The Smart Choice: Why You Should Shop Online For Best Selling Products

Making The Smart Choice: Why You Should Shop Online For Best Selling Products

California Business Journal | California Business News, California News Media, California business articles | Orange County, Los Angeles, San Diego, Inland Empire, Northern California, San Francisco | Huntington Beach CA 92649 | (949) 648-3815
ALL RIGHTS RESERVED BY CALIFORNIA BUSINESS JOURNAL.
Site Design by 1REALTOUR

No Result
View All Result
  • Front Page
  • Business
  • Finance
  • People
  • Featured
  • Opinion
  • Technology
  • Law
  • News
  • Food
  • Art & Culture
  • Human Interest
  • Education
  • Insurance
  • Real Estate
  • Health & Fitness

California Business Journal | California Business News, California News Media, California business articles | Orange County, Los Angeles, San Diego, Inland Empire, Northern California, San Francisco | Huntington Beach CA 92649 | (949) 648-3815
ALL RIGHTS RESERVED BY CALIFORNIA BUSINESS JOURNAL.
Site Design by 1REALTOUR