What Impacts Workers’ Compensation

  • Posted on: Oct 15 2022
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Having workers’ compensation is required by law if your business has employees. Having this type of insurance will keep the employees protected in case of any accident or injury taking place at work. If workers’ compensation is not obtained by the employer, then there may be a good amount of repercussions if the company fails to comply, such as being fined daily until compliance is met.

When it comes to your workers’ compensation premiums, there are a few points to keep in mind concerning the premium you pay. By having a clear understanding of each will assist with keeping costs low. Below are the most common things that can have an impact.

The Company’s Experience Modification

This modification is a calculation that the state makes that is based on the history of claims made. This figure includes historical losses that are utilized to have the performance of the company determined.

The average of the industry is 1.0. When it is any higher, then the premiums you pay will be higher.The good thing is that you are able to achieve a lower factor in order to achieve a lower premium seen as a discount. When you’re above 1.0, you will be paying a 10% increase.

Company Payroll

The payroll’s size and employee classification impacts the workers’ compensation premiums directly. In order to be as accurate as possible, a payroll audit needs to be submitted once a renewal of policy is made. If not, then a penalty will be assessed for non-compliance.

When an audit shows that you had a higher  payroll, then the difference will need to be paid to cover the previous revelation. The company may view this as being burdensome, but when the audit is finished, a refund of the premium amount will be provided. Although this may seem attractive, it is a better idea to have the money available whenever you need it.

Decreasing the number of Workers’ Comp Claims

In order to enhance your modification and keep premiums low is to keep the number of workers’ compensation claims down. Regardless of your business, there should be a program in place that helps to prevent work-place injury.

Managing Claims

When a claim is submitted, it can be managed to alleviate the impact on the company. This management can be a game changer. A good example of this is when an injury takes place and the employee returns to work within three days, then the modification will be lower than if there were more than three days involved. When the worker is unable to return to their normal work routine, then they can take on tasks that are lighter than usual while they are recuperating.

If an absence lasts for three days or more, then the modification will be fully impacted, and have a huge effect on the premium payment. It is a good idea to work with the employee’s doctor so that return-to-work can be determined.


When the premiums of workers’ compensation are calculated, the above factors can have a huge influence on it. By keeping on top of the claims and preventing them from happening will ensure that your premium is as low as possible. When you are ready to see how your modification can be impacted, get in touch with us today.

Posted in: Blog, Workers Compensation Benefits

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