Workers’ Compensation is a mandatory, required-by-law, insurance coverage that most businesses must carry. Various factors influence the rates that an Employer will be required to pay. Understanding this system will help you build and modify your intervention programs to assist an Employer in several ways:

• Decrease the number of work-related injuries
• Increase productivity
• Decrease lost work days
• Decrease Employers’ Workers’ Comp premiums

In total, these points allow the Employer to make changes to manage the cost they are paying for this necessary insurance coverage.

Calculations for Workers’ Compensation Rates

To start, the calculation for Workers’ Compensation premiums is based on a classification system. Employers in the same industry, performing the same functions, will fall in the same classification. Every classification is assigned a rate based on the group’s history of occupational risks.

For example, an occupation with higher frequency and seriousness of injuries will result in a higher Workers’ Comp premium rate, which translates to more expensive insurance coverage.  In following that thinking, this worker injury insurance coverage is very likely to be more expensive for an Employer of roofers than an Employer of office employees.  This average rate for the classification group is the starting point for a new Employer.

The calculations are influenced and modified by:

1. Classification system as described above
2. Changes in the number of employees
3. The amount of payroll that is paid
4. The specific loss history of the company itself

By avoiding workplace injuries, the worker injury claims filed are reduced, which in turn decreases the rates that are paid by the Employer for its Workers’ Comp insurance coverage.

For more information about how you can assist employers in maintaining safety in the workplace, learn more about the KEY Method assessments. We have a proven system that addresses these four issues to help with the reduction of the Workers’ Compensation premiums that the Employers are paying. Contact us today for details about the programs that are available.