A lot of people search the internet trying to get an idea of how much restaurant insurance is in California. However, there is really no way you can get a solid number (or even a good estimate!) just by looking online. There is no “average cost” because there are simply too many variables involved.
Factors Involved in the Cost of Workers’ Compensation for a Restaurant in California:
1. What is the amount of your payroll?
2. Have you had any claims? How severe were those claims?
3. Have you been continuously insured? Has your coverage lapsed?
4. Was your Unit Statistical Filing done correctly? Are there errors?
5. What is your experience modification factor?
6. What is your class code?
7. When is your normal anniversary date?
You really need to speak to an agent who has a lot of experience with restaurant insurance. They will ask you a lot of questions, look up the technical factors, speak to underwriters, and finally do the calculations for you. If you don’t go through all of these steps you will get a wide range of numbers that do not apply to your business.
Workers’ Compensation premiums are also affected by a complex formula that looks like this:
Modification =[(Ap x Cp) + (Ep x (1 – Cp))] + [(Ae x Ce) + (Ee x (1 –Ce))] / E
An average Experience Modification (Ex-Mod) is 100. However, if you have had claims it may be higher. If you have a long history with few claims, it will be lower. You get a credit toward your Workers’ Compensation premium if you have a lower ex-mod, and that credit is determined by the number. You will pay extra if your experience modification is higher than 100.
Just to show you how you cannot get a good estimate without actually having an agent submit it, here is an example:
With a payroll of 1,000,000, class code only for a Restaurant/Tavern, and anniversary date of 10/10/2012, and an average ex-mod of 100 (also displayed as 1), the range estimate could be anywhere between $17,700 to $85,900! Because there are so many other factors that help determine your Workers’ Compensation premium, the only way to get an accurate number is to hire an agent to work for you.
Once you hire an agent, they will get the information you need in order to get an accurate quote. They will check to make sure there are no errors in your formula that could result in higher premiums. Finally, they will advise you of additional ways that you can possibly lower your premiums.
Invensure has a restaurant insurance expert who can help you determine exactly what you will need. If you have a restaurant in Southern California, call (949) 756-4100.