Businesses of all sizes are looking at ways to cut costs. Anytime they can find a way to reduce their overheads expenses, they usually jump for joy (OK, maybe they don’t literally jump for joy, but they generally are happy). Companies in Virginia may be getting a reduction in workers compensation insurance rates next year, which is welcome news to any company in Virginia that has employees.

The Richmond Times-Dispatch is reporting that the group responsible for determining workers compensation insurance rates in Virginia has proposed an average rate cut of 12.4 percent for most companies. This is great news, and certainly welcome in the current economic times, when companies are more used to seeing costs go up then to be decreased.

The expected workers compensation insurance rate decreases are due to a couple of key factors:

• The rate at which workers comp insurance claims are filed has dropped by about 6 percent from 2007 to 2008 (the last year data is available).
• Very little increase in amount of lost wages paid out for each claim.
• The rate at which medical costs are increasing has continued to slow.

Depending on the industry a company is in, their workers comp insurance rates may decrease anywhere from an average of 10.3 percent to 14.9 percent. Workers compensation rates are set based upon the industry a company is in. The idea being that certain industries (such as construction) have a higher incidence of workers comp claims, while other industries (office jobs) have a lower rate, therefore companies in the respective industries should pay rates based upon the risk of claims.

Every state has workers compensation insurance requirements for companies that have employees. Each state’s requirements are different, so check with your state to see if you are required to carry workers comp coverage. And if you are in Virginia, look forward to lower rates next year.

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1. Workers Compensation Insurance
2. Workers Compensation Insurance – Are You Covered Correctly?
3. Business Insurance – Specialized Coverage
4. Contractors Insurance
5. Small Business Insurance