What Makes a Business High-Risk?
If you work in an industry like manufacturing, cannabis, or logging, you’ve probably heard the term “high risk,” especially when it comes to audits and Workers’ Compensation coverage. But what exactly does it mean to be high-risk?
Defining High-Risk
When a business or industry is deemed “high-risk,” it means they have a greater likelihood of experiencing issues like workplace accidents, financial losses, or other occupational risks. There are many factors that can make a business high-risk. Some of these include:
Industry Risks
- Most industries have inherent risks. However, some may have more inherent risks than others. For example, a manufacturing plant might have heavy equipment and fast-moving machinery. This means a worker at a manufacturing plant is more likely to suffer injuries than a worker in an industry without inherent risks like these.
Other Occupational Risks
- Similarly, some industries require more strenuous, physically demanding labor from their workers. For instance, workers in industries like agriculture and roofing might work long hours in hot or cold weather conditions, or a worker at a warehouse might lift heavy boxes. Since labor-intensive roles like these are more likely to cause injuries, they can cause a business to be labeled high-risk.
Lack of Employee Safety
- For all businesses, employee safety is very important. If a business does not take adequate steps to protect their employees from common workplace injuries, it increases their chance of being considered a high-risk business by insurance carriers or auditors.
Industry Regulations
- Like how some industries have inherent risks, some may also have strict industry regulations, like employee safety regulations. If a business is not compliant with these regulations, it can lead to issues like fines and lawsuits. Due to the harsh consequences of falling out of compliance, businesses in industries with strict regulations might be considered high risk.
What Happens to High-Risk Businesses?
When a business is high risk or in a high-risk industry, it can lead to many complications. One of these complications is Workers’ Compensation coverage. For high-risk businesses, it can be difficult to secure the coverage they need to protect their employees and business from workplace accidents, injuries, and illnesses. This is because many insurance carriers turn down businesses with high risks. High-risk businesses might also experience higher Workers’ Compensation premiums, or face limited or expensive Workers’ Compensation coverage options.
At Work Comp Business Insurance Solutions, we help business owners find the best Workers’ Compensation and payroll solutions.To learn more about our services and how we can help your business, visit us online at https://www.wcbis.com.
