How Your Workers’ Comp Premium is Calculated

An Excerpt From My Book, Simmonds on Workers’ Compensation Insurance:

The workers’ compensation insurance premium calculation is pretty straightforward. In short, the insurance company takes your payroll in the various classifications and multiplies it by a rate per $100 of remuneration.

If you have several different employment classifications on your policy, the above calculation will be done for each class.

Insurers may add surcharges or credits to the total before coming up with your final premium. Find out what credits your insurer has available. Ask what needs to be done so that you can qualify for maximum credits.

You may also have an experience modification, a ratio of expected losses to actual losses (more info on the experience mod can be found at

Most insurers have multiple rating plans – substandard, standard, and preferred. Ask your agent to identify your policy plan. Find out what needs to happen so you can qualify for a lower rate.