Workers comp can be a source of challenge and frustration for many California employers, especially as it relates to premiums and claims. Two sources of information that employers can refer to in order to gain a better understanding of the current state of the market for workers’ compensation insurance are the Division of Workers’ Compensation (DWC), and The Workers’ Compensation Insurance Rating Bureau of California (WCIRB). THE DWC is a division of the California Department of Industrial Relations, a government entity. The WCIRB is a private association consisting of the companies licensed in California to provide workers’ compensation insurance.
Factors used to determine workers’ comp premiums
One of the factors that workers’ compensation insurance companies use to determine the premium amount of workers’ comp insurance is the industry classification of the employers. The classification is described by the California Code of Regulations Title 10, section 2318.6, and is promulgated by the WCIRB. Each employer in California is classified under one of the industry classifications. There can often be disagreements between what the Bureau determines and what classification the employer believes best fits the employer’s business.
The WCIRB also determines a “pure premium rate” for each industry classification, which is based on the aggregate amount of claims reported by WCIRB member insurance companies. The pure premium rates are submitted to the California Department of Insurance Commissioner for approval but are not necessarily the rates that insurance companies charge. The rates charged by the insurance carrier are based on the type of job classification for the employee, and are expressed in amounts per $100.00 of employer’s payroll expense.
Another factor used to determine an individual employer’s premium is their past-history of work related claims. An experienced workers comp defense attorney can help you defend against baseless claims, saving you money spent on premiums down the road. Although nothing can be done about previous or historical events, savvy employers will ensure that work place safety and reporting programs are properly implemented and adequate to help prevent future injuries or guard against claims that may be fraudulent.
For more information on workers comp insurance, contact experienced business attorney Drew E. Pomerance today.