Many states use the standards of the National Council of Compensation Insurance to determine workers’ compensation insurance rates. The NCCI is a non-government, private organization that uses classifications to determine the risk factors involved in particular jobs.
We work with clients to ensure they understand workers’ compensation insurance, and evaluate their needs to ensure their employees are properly classified.
Premiums are determined through a formula which includes a number of factors including salary, benefits and other variables. A remuneration number is then arrived at and used in conjunction with the risk factor classification of the job to arrive at the cost of the insurance. Premiums can also be adjusted by “experience modification factors,” which are standards set by the NCCI and other organizations for reducing premiums based on a company’s reputation.
Initial premiums are based on a number of prognostications, including the amount of wages to be paid to workers. At the end of the policy period an audit is performed to determine the actual premium amount. The outcome of the audit can result in either a refund or additional premiums due.