Workers compensation is a complex and often costly part of running a business. Ever changing legislation in this area can make it difficult for employers to manage, and subject them to harsh penalties for non-compliance.
What affects my workers compensation premium?
Workers compensation premiums, and how they are calculated, are complex. Many businesses don’t realise they are paying the incorrect amount of workers compensation premium and overpayments are not uncommon.
The most appropriate workers’ compensation insurance coverage needs to be chosen to suit your business. Factors which influence the ultimate cost of the premium include:
- the type of business or enterprise
- the structure of the business or enterprise
- the size of the business or enterprise (most commonly measured in the total remuneration cost)
- the industry the business or enterprise operates within
When securing or renewing workers compensation insurance, a further factor related to the claims experience (that is the nature and costs of claims in the past for that business or enterprise) will also impact the premium cost. For example, poor claims experience (an increase or high relative in the number of injuries and workers compensation claims) will most likely result in an increased premium cost.
This article was kindly provided by member AB Phillips. For any queries arising from this article or any questions about Workers Compensation, contact an AB Phillips Workers Compensation consultant on 1300 242 136.