The lowest workers comp quote can be the right one, but only when it rates the same work, payroll and contract needs as the others. Quotes for one business often differ because they assume different classifications, payroll or endorsements, and those gaps tend to surface at the premium audit. Compare what each quote assumes before comparing the price.
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A workers comp premium is built from payroll, the classification each person's work falls under, the carrier's rates for those classifications, any experience modification and the credits or charges a carrier applies. When one quote comes in well under the rest, at least one of those inputs is usually different. Sometimes that is a real advantage, such as a carrier program that fits your trade. Sometimes it is an assumption that changes later, subject to policy terms and the carrier's determination.
A policy is priced on an estimate and settled at audit, so the number on a quote isn't the final cost. A quote built on the right facts is usually the better buy, even when it isn't the lowest one.
Same facts, every quote
Give every carrier the same payroll by classification, the same description of work and the same contract requirements. Quotes built on the same facts are the only ones worth comparing on price.
A broker can shop several carriers with one consistent set of facts, so the quotes you compare are rating the same business. When your payroll and renewal month are handy, get a workers comp quote, or start from your trade on contractor workers comp by trade or restaurant and brewery workers comp. Audits, owner rules and state changes are covered in the other workers comp guides.
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Not by itself. A low quote can be a good fit when it rates the same classifications, payroll and endorsements as the others. It becomes a problem when the price depends on an assumption that won't match your records, because the policy is settled at audit.
Often because the quote assumed lower payroll or a lower-rated classification than the audit found. The deposit premium is an estimate, so payroll that moves classes or comes in higher is billed after the term, subject to the policy and the carrier's review.
They can read the same description differently, especially for mixed work. Classification follows what each person actually does, so describe every type of work and how payroll splits among them, and ask each carrier which classifications it used.
Some do. A blanket waiver of subrogation, alternate employer or other-states coverage may add a charge or may not be offered under every program, so a quote without them can look lower than one that includes what your contracts require.
Give every carrier the same payroll by classification, the same work description and the same contract requirements, then compare classifications, payroll basis, experience mod, endorsements, employers liability limits and service before comparing price.
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Reviewed by David Gleason, Principal, on .
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Compare what each workers comp quote assumes before comparing the price.
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