Workers Compensation

The Workers’ Compensation Act was first enacted in 1913. There have been numerous changes to the Act since that time, but the main premise of the Act has always been to provide wage replacement and other benefits, as well as medical treatment, for those employees who have been injured, disabled, or killed while performing their jobs.

Determining Proper Premiums

There are three criteria which the insurance companies generally use to determine the payment of premiums. These are (1) the payroll; (2) the employer classification; and (3) the experience record and number of accidents and severity of injuries included for this employer.

The first element considered is the payroll and these are determined in blocks of $100 of payroll sums. The second consideration is how an employer will be classified into different categories by industry type. Each classification is designated to pay a certain amount of workers' compensation premiums per $100 block of payroll. Roofers who are at a high exposure to injuries will have a higher experience factor than office personnel who have a low exposure to injuries.

The last consideration is what is known in the industry as the "experience modification factor" or "experienced mod" or simply the "mod." This calculation applies to policies with more than $5,000.00 in premiums. In determining the experience mod, the individual employer is compared with other employers within the classification based upon the frequency of accidents and severity of injuries. The more accidents an employer has had in the past, the higher the modification rating.