Minimum premium are the lowest premium we can charge you for our workers’ compensation insurance and cover the cost to handle your policy. We’ll assign you a minimum premium policy if your payroll is small enough that your calculated premium is less than the minimum premium amount for your type of business. The minimum premium amount can vary depending on the governing class code assigned to your policy.
Minimum premium does not change based on the length of your policy term. If your policy is a minimum premium policy, you will pay the same amount whether your policy is for a few months or a full year, or even if you cancel before your policy expires. Our rates for minimum premium are approved by the state insurance regulator, and because we’re a not-for-profit entity, none of your premium goes to shareholders.
How billing and payroll work for minimum premium policies
Minimum premium policyholders pay an up-front premium payment at policy inception that’s equal to the amount of the minimum premium. You’ll report at least one payroll during your policy term and at the end of the term, we’ll finalize your policy. If the premium calculated is higher than the minimum premium, then you’ll owe that amount. You’ll always pay at least the minimum premium. If you choose to renew your policy, you will pay the up-front premium at the start of your renewal term. If rates change or if your payroll increases, you may have to pay more.
Common questions about minimum premium policy
Why do you charge a minimum premium?
Every policy has a cost to administer, regardless of the amount of payroll or length of policy term. The minimum premium ensures we can cover costs related to administering policies.
Can I cancel my minimum premium policy to pay less than the minimum premium?
No. Regardless of the length of the policy term, you’ll still owe the minimum premium.