Last month, Assistant Audit Manager Chris Messenger wrote a helpful blog post outlining how we calculate your workers’ comp premium. As Chris explained, your premium, or how much you pay for workers’ comp coverage, is based on your payroll, including both employees and contractors.
While your payroll is a large factor in calculating your premium, it is not the only one. The type of work your employees and contractors do also affects your premium. We use industry standard NCCI class codes to classify the nature of the work. With more dangerous work, there is a higher risk of injury, so this class code will cost you more in workers’ comp premium.
The other factor is what we call the "experience modifier” or "e-mod.” This is calculated based on your company’s premium and claims’ history. While your employees may be performing risky work, you might value safety and take precautions to ensure a safe workplace. In this instance, your e-mod may reduce your premium. The opposite would likely happen if you take few steps to keep your employees safe, leading to frequent accidents and injuries. In this case your e-mod could actually cause your premium to increase.
Class codes and the e-mod may sound confusing, but during tomorrow’s webinar, I will explain them in depth, give examples, and answer questions you may have. Specifically, I will look to answer the following questions:
- What role do class codes play in my premium?
- What is this "experience modifier” or "e-mod” and how is it calculated?
- How does LCI use the e-mod to calculate my premium?
I look forward to tomorrow's webinar. If you have any questions in the meantime, I can be reached via email at firstname.lastname@example.org. You can register for the webinar here