Underwriting FAQs

How is my premium calculated?

Premium is calculated based upon the rate for the business classification code (or combination of codes) that best describes your operations. The National Council of Compensation Insurance (NCCI) is the national organization that determines the class codes for your operation. Each class code has a rate per $100 of payroll that is multiplied by your total estimated annual payroll for that code. Other rating factors may also affect your premium, such as your safety practices and experience modification factor.

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What is the experience modification factor?

​The National Council of Compensation Insurance (NCCI) develops your experience modification factor. It reflects your claims history compared to other businesses in your classification. Premiums are adversely affected if your claims history is worse than average or positively impacted if better than average. The experience period generally consists of the last three completed policy years.​

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How can I reduce my experience modification?

​Reduce losses! Your business can reduce your experience modification by reducing the frequency and severity of your claims. Reduce the number of injuries as much as possible and, when you do have a claim, reduce the costs by getting the employee back to work as soon as medically possible.​

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What does the premium audit process entail?

​The determination of premium is a function of remuneration, predominantly payroll. At the inception of the policy, the premium is based upon estimated payroll information. As a result, policyholder financial records are reviewed at expiration in order to accurately verify the amount of payroll for the policy period. Any changes in payroll may result in an additional premium or a return premium.

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What criteria are used to determine who is an independent contractor?

​Although no one factor is determinative, issues such as work schedule control, invoicing, uses of tools/equipment, as well as the existence of a separate liability policy, are taken into consideration when determining whether the person is truly an independent contractor versus an employee. Also, an independent contractor must file a DWC-11-IC “Notice of Designation as Independent Contractor”​ with the Department of Labor and Training.​

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Can an employee exclude themselves from coverage?

​Yes, an employee or executive officer can exclude themselves from coverage by completing Form DWC-11 "Notice of Claim of Common Law Rights"​ and filing it with the Department of Labor and Training.

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