Insurance

Hi, I was just wondering if everyone carries workmans comp for their employees? I do and the expense is killing me! I am considering dropping it due to the fact that it is taking up ALL of my profit. Any suggestions?

My first suggestion would be to toss out how much you’re paying, how many inside employees and how many drivers. Gross sales and avg weekly hours for drivers and inside will also help. Others here are more than willing to give out general figures that they have and can give you some feeling for if you’re paying about right or too much and maybe how to reduce the costs.

(This is all just regurgitating information I’ve read on here and in the archives, not from personal experience).
The insurance companies base their costs on how much risk you tell them that they have. For instance, if you opened and told them you expected to do $500k annually but are only doing 300k, you don’t have as many payroll hours as a shop with $500k and thus you are over-paying. Insurance companies are as bad as Uncle Sam. Don’t tell them you’re doing $100k when you’re really doing $500k. When someone files for workman’s comp, the insurance company is liable to try to get information out of the employee such as how many employees are normally there at one time, etc.

you also might consider “employee leasing” as an option…they’ll do your payroll & because they are a bigger company than you, they’re ins rates are cheaper…we use leasing a lot in Fla

Insurance is a funny thing. We pay and pay and pay and don’t seem to get much bang for our buck. I think one of the most dangerous things we can do is operators is begin to get the mindset insurance is a frivolous expense. Just cuz you don’t use it doesn’t mean you don’t need it.

It’s not like magnets or an extra handful of cheese here and there. (Stuff you can cut cost on) In our state I believe if you have over 5 employees it is a law to carry it.

We have been open 13 years…I have paid thousands and thousands for insurance these days I don’t even flinch when I get the bill. I happily pay it…Why?
Maybe it was because I did not have to worry one bit when the kid grated his hand in the cheese grater.

Maybe it was the driver who broke her wrist when she had an accident and had to have 3 surgeries.

Maybe it was the guy last december who was in an accident and spent a week in the hospital.

Maybe it was the girl who had a seizure and fell and hit her head and I didn’t even have to figure out if it was covered cuz it wasn’t my problem.

Maybe it is from when the kid got his hand shut in our deck oven and was severly burnt.

Maybe it was the 3 times someone has cut the tip of their finger with our knives.

If you can’t afford the insurance check around you can get a better rate. My belief is there is a core problem in your company when you start cutting out things that are just the cost of doing business. As owners we owe it to our employees to have it, what if something happens to them? Sure you may have yourself and your assets protected but at the end of the day what about the employee who gets injured don’t we owe it to them to have our business affairs in order?

Someone really should mention the probability of legal problems as Workers Compensation is required by law in most if not all states. I do not remember if it is also a federal law. The guys above and some others will offer to help find ways to reduce your expenses. There are some wonderful resources out there to be sure.

As much as it hurts writing those checks, and seeing no visible benefits . . . I find in my little world view that not only is it illegal, but also insanely foolish in the restaurant game to skip out on Workers Comp coverage. One good slip and fall, one grated hand, or one burn could close your shop forever.

The workers compensation laws provide mandatory insurance coverage for employees. the very real benefit to us, the employers, is that the employees are NOT ALLOWED to sue us for the injury. There will be very slim and specific means of skirting those prohibitions, but that is our payoff. We are free of litigation in return for insuring the workers. It is a liability coverage in some ways, and required by law.

It is a lousy thing when it comes bill-paying time . . . .but those folks make my pies, and mop my floors, and deserve a little protections . . . and we can’t afford a lawsuit in case of injury or work related illness.