Avionics News December 2015 - 39
The third section of a standard application asks for the current
2. Health insurance.
policy period, and your proposed effective date for the new one.
3. Safety program.
Part A/1 of this section lists the states you would be providing
4. Drug testing.
workers' compensation; the amount paid under this section has
After everything has been completed, the policy has been purno set limit. Part B/2 is the employer liability section, which prochased, and the renewal date is around the corner, there will be
vides coverage to the employer in the event an employee feels the
a friendly visit from the carrier, or a subcontractor, to convey an
employer is negligent and pursues legal action instead of acceptaudit. Often, this makes the insured uncomfortable because they
ing workers' compensation. Employers' liability has a basic set of
don't know what to expect. Once again, this is where choosing the
limits that applies to all states, except for monopolistic states. The
right broker makes a difference. When reporting your payroll, it is
limits are $100,000 for each accident, $100,000 for disease (each
imperative to report the correct numbers and job descriptions for
employee), and $500,000 for disease (policy limit). These are the
each employee. It is not uncommon for an insured to be notified
minimum limits; in aviation, most carriers'
of a large balance due at the end of the pollimits are set to $1 million across the board.
icy term due to improper reporting. If you
Monopolistic states, such as North Dakota,
have plans of hiring someone when going
WHEN STARTING THE PROCESS
Ohio, Washington and Wyoming, only prothrough the application process, advise
OF ACQUIRING WORKERS'
vide workers' compensation through the
your broker so they can account for this.
COMPENSATION, IT'S
state.
The worst-case scenario is you don't hire
BENEFICIAL TO HAVE
In the individuals included/excluded
someone and receive a refund. As the year
section, partners, officers and relatives
goes by, it is always beneficial to report any
ALL THE
have the option of choosing to be included
changes in your payroll with your broker.
NECESSARY
or excluded on the policy. To have one
This can save you from unwanted surprises
of the personnel included, a payroll or
at the end of the policy term.
INFORMATION
remuneration must be posted, along with
How does a carrier determine a preREADILY AVAILABLE.
a workers' compensation class code. Your
mium from all the numbers you provide?
endorsed aviation broker should help you
Different carriers have different rates for
find the ideal class code to assign each
class codes and safety measures. Your broperson. The class code is determined by the particular tasks that
ker should outline things as you go along to help you understand,
person provides to the business. The employee job descriptions
but the basic breakdown is as follows:
should be a good resource for these assessments.
1. Each class code has a rate that is multiplied by the
On the state rating worksheet, you should include each locapayroll listed:
tion, all class codes for that location, and the payroll for each
a. Class code 7428 has a rate of 8.8 percent and
class code of that location. Each carrier will have a set rate
multiplied by payroll of $100,000.
assigned to each class code to calculate a premium for that
b. Class code 8810 has a rate of .69 percent and
particular location's class code. For example, ABC Avionics has
multiplied by payroll of $100,000.
two locations with employees. An employee who troubleshoots
c. Class code 7422 has a rate of 7.4 percent and
the avionics systems on the aircraft would be listed as a 7428
multiplied by payroll of $50,000.
class code for location 1, and an employee who bench tests the
2. The sum of these class codes, called manual premium, is
instrument would be listed as a 3685 class code for location 2.
then multiplied by MOD rate:
To complete the prior carrier information, refer to your loss-run
a. Class codes sum is $13,200 and MOD rate is
report. These reports are obtained through the current carrier and
0.79. You multiply by .21 because anything under
show the losses that have occurred during the last five years. The
1.0 would be a discount.
report will provide an experience modifier rate for the company.
b. Class codes sum is $13,200 and MOD rate is
The modifier can increase or decrease your premium due to your
1.02. You multiply by the full 1.02, and this is
loss history. Stay cognizant of this, because it can quickly, and
why your MOD rate can hurt.
easily, impact your bottom line. If this is the first time purchasing
3. Each carrier has a few remaining steps, unique to their
a policy for workers' compensation, a signed no-loss statement is
business model, to calculate the final premium.
required by carriers. This is followed by a brief description of the
Having workers' compensation insurance in place for your
applicant's operations and a list of yes/no questions.
business is essential, but it can be confusing and overwhelming.
Having the following items in place will aid you when applying
However, working with a knowledgeable and trusted broker can
for workers' compensation and attract quality employees:
keep you in compliance with state laws, add value to your employ1. Disability insurance.
ees, and bring you invaluable peace of mind. q
avionics news
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december
2015
39
Table of Contents for the Digital Edition of Avionics News December 2015
Avionics News December 2015 - Intro
Avionics News December 2015 - Cover1
Avionics News December 2015 - Cover2
Avionics News December 2015 - 1
Avionics News December 2015 - 2
Avionics News December 2015 - 3
Avionics News December 2015 - 4
Avionics News December 2015 - 5
Avionics News December 2015 - 6
Avionics News December 2015 - 7
Avionics News December 2015 - 8
Avionics News December 2015 - 9
Avionics News December 2015 - 10
Avionics News December 2015 - 11
Avionics News December 2015 - 12
Avionics News December 2015 - 13
Avionics News December 2015 - 14
Avionics News December 2015 - 15
Avionics News December 2015 - 16
Avionics News December 2015 - 17
Avionics News December 2015 - 18
Avionics News December 2015 - 19
Avionics News December 2015 - 20
Avionics News December 2015 - 21
Avionics News December 2015 - 22
Avionics News December 2015 - 23
Avionics News December 2015 - 24
Avionics News December 2015 - 25
Avionics News December 2015 - 26
Avionics News December 2015 - 27
Avionics News December 2015 - 28
Avionics News December 2015 - 29
Avionics News December 2015 - 30
Avionics News December 2015 - 31
Avionics News December 2015 - 32
Avionics News December 2015 - 33
Avionics News December 2015 - 34
Avionics News December 2015 - 35
Avionics News December 2015 - 36
Avionics News December 2015 - 37
Avionics News December 2015 - 38
Avionics News December 2015 - 39
Avionics News December 2015 - 40
Avionics News December 2015 - 41
Avionics News December 2015 - 42
Avionics News December 2015 - 43
Avionics News December 2015 - 44
Avionics News December 2015 - 45
Avionics News December 2015 - 46
Avionics News December 2015 - 47
Avionics News December 2015 - 48
Avionics News December 2015 - 49
Avionics News December 2015 - 50
Avionics News December 2015 - 51
Avionics News December 2015 - 52
Avionics News December 2015 - 53
Avionics News December 2015 - 54
Avionics News December 2015 - 55
Avionics News December 2015 - 56
Avionics News December 2015 - 57
Avionics News December 2015 - 58
Avionics News December 2015 - 59
Avionics News December 2015 - 60
Avionics News December 2015 - 61
Avionics News December 2015 - 62
Avionics News December 2015 - 63
Avionics News December 2015 - 64
Avionics News December 2015 - 65
Avionics News December 2015 - 66
Avionics News December 2015 - 67
Avionics News December 2015 - 68
Avionics News December 2015 - 69
Avionics News December 2015 - 70
Avionics News December 2015 - 71
Avionics News December 2015 - 72
Avionics News December 2015 - Cover3
Avionics News December 2015 - Cover4
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