About Workers' Compensation Insurance

Whether you are an established company looking for cost-saving solutions or a start up company setting up your first policy, Chief Insurance Solutions is here to help you secure the lowest workers' compensation insurance quotes on the market! Are you ready to explore new, cost-saving workers' compensation insurance coverage solutions? Complete our quick and easy Online Quote Application today and an expert broker will start preparing your quotes!

WORKERS COMP FACTS

  • Workers' Compensation Insurance provides wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence.
  • Workers' Compensation Insurance is a no-fault system, meaning the employee doesn't have to prove the employer is at fault to receive benefits.
  • Businesses that meet the state requirements must carry workers compensation insurance by law. Learn you State-Specific workers' compensation requirement and regulation on our Locations Page.
  • State statutes determine how most workers' compensation programs are run. Some States have an Assigned Risk Pool or State Fund for hard-to-place companies, but we can usually offer alternatives to these last-resort options. 

Experience Modification Rating

Experience Modification Rating (also referred to as EMR, E-Mod, MOD Rate, Experience Rating, or Experience Modification Rate) is a number used to gauge the cost of injuries in the past and predict chances of risk in the future for an employer. This number is generated and issued by the Rating Bureau for your state. Simply put, the score is calculated by comparing the claims that your company had compared to an average expectancy of claims for companies in your operations. If the EMR is 1.00 that means the company is no more or less risky than average. If the EMR is higher than 1.00 that means the company is riskier than average. If the EMR is lower than 1.00 that means the company is safer than average. This figure is applied as a multiplier when calculating premium, so depending on whether it is over or under 1.00 will result in a premium debit or premium credit. Underwriters will also evaluate the past few years of a companies EMR to see if a positive or negative trend can be identified.

Workers Compensation Insurance Premium Calculation

Workers compensation insurance premium is calculated as follows: Multiply the payroll for each individual class code by the base rates assigned to those class codes. Dividing that by 100, since each rate is per $100 in payroll. Then multiply that by the experience modification.
In the examples below, you can clearly see how nothing affects premium like the experience modification. ​
Example 1: With No experience modification rating

Payroll for class code 8810: $100,000
Base Rate for class code 8810: 2.00
Experience Modification: 1.00

$100,000 x 2.00 / 100 x 1.00 = $2,000
Example 2: With Debit experience modification rating

Payroll for class code 8810: $100,000
Base Rate for class code 8810: 2.00
Experience Modification: 1.30

$100,000 x 2.00 / 100 x 1.30 = $2,400
Example 3: With Credit experience modification rating

Payroll for class code 8810: $100,000
​Base Rate for class code 8810: 2.00
Experience Modification: .88
​
$100,000 x 2.00 / 100 x .88 = $1,760

The Workers' Compensation Insurance Audit

PAYROLL RECORDS
  • Payroll journal and summary
  • Your check book, if the only way you keep records
  • Federal tax reports (941’s that cover the policy period)
  • State unemployment reports and individual earnings records
  • All overtime payments shown individually
EMPLOYEE RECORDS
  • Detailed explanation of each employee's job duties
  • Number of employees
  • Hours, days, or weeks worked annually
description of business operations
  • What services or products you provide
  • What clientele you target
  • The proximity of you work
CERTIFICATES OF INSURANCE
  • For all subcontractors
  • For all independent contractors
CASH DISBURSEMENTS
  • Payments to subcontractors 
  • Cost for materials
  • Casual labor
Being prepared for your Workers Compensation Audit is not something to think about right before your Audit is scheduled, but something to plan for in advance. The information below is generally requested at the time of your physical Workers Compensation Audit. Having these records well organized throughout the year reduces the hassle of preparing for the Audit and simplifies the process.

Two Types of Workers' Compensation Insurance Claims

The first type of claims are frequent claims. Frequent claims are claims that happen at least a few times a year, but the actual cost of the losses are fairly small. Small, frequent claims seem like less of a bother to the employer, but they are a red flag for insurance companies. This is because they lead the insurance company to believe that nothing is being done to prevent these claims from reoccurring. With the help of a claims analysis from Chief Insurance Solutions, new safety procedures can be implemented to prevent the type of claim from reoccurring and once again put the employer in a favorable position with the insurance companies.
The second type of claims are severe claims. Severe claims, or shock claims, happen infrequently, but they are more serious accidents or injuries and consequently more expensive. Severe claims seem more detrimental to the employer, but are less of a red flag for insurance companies. This is because the insurance company can see them as a fluke that does not necessary reflect inadequacies in the safety procedures or operations of the employer. Chief Insurance Solutions knows how to help underwriters isolate these types of claims when reviewing for quotes. This keeps the employer in a more favorable position to the insurance company when severe claims are present.