The experience rating of your business, can increase the cost of workers compensation insurance premiums. High experience ratings mean that your business is a higher risk to insure. Employers with more exposure to risk such as general contractors, have higher premiums due to the occupational risk classification. Your experience rating will also be increased/decreased depending upon the amount of claims that you have filed within the last 3 full policy years. A major factor is the amount of small claims that your business has which is used to predict the future amount of claims that you will have. Lowering your small claim, injury and accidents can be done by committing to workplace safety training for all employees.
Your experience rating is based upon the history of accident and injury claims filed for workers comp. Lowering a high experience rating will reduce the cost of insurance. It can depend upon the group or the individual history. It can also depend upon the occupational risk classification of work. For example, California roofers have a high occupational risk classification and rates are higher than average.
High experience mod is not just influenced by large impacting accidents and injuries. Small claims, under $5,000 have a higher impact on experience rating because they are more frequent and predictable. Large claims are capped and have an expected risk associated with each employer.
Insurance companies report losses and payrolls of your business on scheduled dates to a rating organization. The experience mod is calculated and delivered to the insurer for use. Experience rating is calculated from the three previous full policy years, where 2011 is calculated from 2010, 2009, 2008. To improve your experience rating, it is important to provide safety training for all employees and to stay committed to lowering accidents on the job.
Our agency will help you to lower your experience rating by providing training and educational seminars to your employees. We may also be able to reduce your premiums by submitting scheduled rating factors and correct classification codes.
* The above terms and opinions are to be used for descriptive and reference purposes only. Please review your individual policy for full definitions, exclusions and endorsements. Should you have any questions, please contact your Broker or Agent.