Understanding Workers’ Compensation Rating: Calculating Premiums for Employee Payroll and Injury Coverage

Workers compensation rating is developed by applying a rating bureau job classification rate to each

$100 of payroll

employee’s payroll. The rating bureau job classification rate is determined by assessing the type of work that employees in a specific job classification perform. For example, a construction worker who is classified as a roofer would possibly have a higher job classification rate because they are more susceptible to injuries, such as falls, than a worker who is classified as an office clerk.

Once the job classification rate has been determined, it is then applied to each employee’s payroll to calculate the premium for workers’ compensation insurance. The premium is the amount of money that an employer pays to ensure that their employees are covered in the event of an injury or illness that occurs due to work-related activities.

The amount of premium that an employer pays for workers’ compensation insurance is also affected by other factors, such as the number of claims that have been filed in the past and the employer’s safety record. Employers who have a good safety record and few claims filed against them are typically offered lower premiums than those who have a poor safety record and frequently have claims filed against them.

In conclusion, workers’ compensation rating is the process of determining the premium that an employer pays for workers’ compensation insurance based on the job classification rate and payroll of each employee.

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