This tool provides an estimate of a business’s workers’ compensation premium adjustment based on its past claims experience. It factors in payroll, industry classification, and claims history to determine a multiplier that adjusts the standard premium. For instance, a business with fewer claims than average for its industry will receive a rate below 1.0, resulting in a lower premium, while a business with more claims than average will have a rate above 1.0, leading to a higher premium.
The use of such a calculation offers significant advantages. It incentivizes workplace safety and risk management by rewarding companies that maintain safe environments and minimize employee injuries. Historically, the implementation of experience rating systems has been instrumental in promoting safer work practices across various industries and reducing overall workers’ compensation costs.
