With few exceptions, workers compensation rates have been declining across the country for several years. Declining rates appear to offer employers relief, especially during these tough economic times. But declining rates can be deceiving and ultimately lead to greater total workers compensation costs. Here are three pitfalls employers should be alert to avoid when workers compensation rates go down.Pitfall #1 – Assuming that when rates decline, premium costs will decline.
Paradoxically, declining rates may actually drive up the employer’s costs and pose greater risks to their business. Many employers are often surprised to learn that a reduction in rates does not always mean a reduction in direct workers compensation costs.
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