Q&A: Employers Ask
about Workers’ Comp
Q. “Why do some larger Workers’ Comp claims
increase premium less over the three-year payback period versus smaller
claims that increase premiums more?”
A. Frequency of claims as well as severity impact the calculation of the
Experience Modification factor. The experience rating formula has a greater
impact on the first $5,000 of each claim, and a lesser impact on costs over
$5,000. So, one claim of $100,000 will have less of an impact than ten different
claims, totaling $100,000.
There also is a cap or maximum amount that affects the claim. |