Worker Compensation



Understanding how to calculate a workers compensation experience rating modification can go a long way in understanding how to keep workers comp premiums in line, but it is a complex formula. Workers compensation insurance companies are responsible for reporting class code, payroll and loss data to the rating bureaus (NCCI and independent state bureaus). Incorrect, poorly updated, and overstated values are often reported in this process and lead to inaccurate experience modification calculations, resulting in higher workers comp premiums. Many times the same errors show up in multiple policy terms. We have found that overcharges occur 70% of the time due to mod errors; most businesses are paying more than they should and have been for many years.

Many people mistakenly believe that insurance companies calculate the experience mod the same way a loss ratio is calculated, by dividing the amount of money paid out in claims by the amount of money paid in premiums. However, the true basis for the experience mod compares the loss experience of an individual business to ALL other businesses losses in the same industry.

Common errors made in the experience rating formula include misclassification of employees, payroll errors, inflated claim reserves, incorrect primary & excess split points, and unreported subrogation figures.

The good news, once we find and change the errors, you could be entitled to the return premium generated by such corrections. Finding historical inaccuracies that have compounded over multiple policy terms can result in a premium refund in the thousands.

For companies with annual premiums of $75,000 or more, we perform audits on a contingency basis. Our fee is simply a percentage of the recovered overcharges. If we find no savings and do not recover any premium, there is no cost for our confidential review.

At Better Business Planning we work with a team of experts that know how to identify and correct these costly errors. Our in-depth knowledge allows us to aggressively seek refunds and reduced premiums with the insurance carrier for our clients. Click below to request more information about our Workers Compensation Premium Recovery Audit.

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125 West Orchard Street,
Itasca, IL 60143



+1 630 775 8554