Key drivers to your workers compensation premium

Did you know, there are many factors that can influence your workers compensation premium, some that you may not even be aware of. Knowing your key drivers to premium can put you in a position where you can more effectively manage your workers compensation program and reduce your overall premium, Safe Scope explains.

Read on to learn more about the factors that may increase your workers compensation premium and common strategies and tactics to manage them.

How are workers compensation premiums calculated?

Your premium is the amount you pay for workers compensation insurance. Workers compensation models can differ by state and jurisdiction, regardless, having a workers compensation program in place is essential for any workplace (business).

Generally, the premium a business pays for workers compensation is calculated based on your Workplace Industry Classification (WIC) multiplied by the total remuneration paid to staff.

To learn more about industry classifications, please see our article on Workplace Industry Classifications. In addition to this calculation, the claims performance is taken into consideration.

Why is this important?

Your claims performance is one of the key drivers to premium, this means, if your business has had claims, it is likely that your premium will reflect this when it comes to renewing your workers compensation insurance.

Some claims can have a substantial impact on premiums if they are active for an extended period of time.

It is therefore imperative that employers proactively manage all claims to ensure claim costs do not escalate.

Having a solid claims management strategy that drives positive outcomes and focuses on a return to work is the most important factor when it comes to minimising claims costs and increases to your workers compensation premium.

How can I reduce the impact of a claim on my premium?

Focus on implementing controls on what you can influence. This means looking at your WIC (there’s more information in our article. Demystifying Workplace industry classification from the Summer 2023 Recruitment and Co magazine, and making sure that your business is classified under the most appropriate classification, or classified according to the appropriate segments, make sure you have conducted a remuneration review and implement robust claims management processes and procedures.

These tactics will stand you in good stead when it comes to minimising your overall premium.

If this sounds challenging, seeking the help of a professional consultant is always a good idea.

A workers compensation consultant has detailed knowledge of the systems, strategies, and tactics to help you reduce costs in your business. If you have existing claims, they can come in and support a quick resolution, thereby mitigating the effect each claim may have to your claims performance, thereby improving your overall claims performance.

A seasoned expert can also use their knowledge of the relevant legislation to your advantage through claims management. They can also help you forecast your insurance premiums to ensure you are prepared for upcoming renewal costs.

A robust approach to risk and claims management is beneficial to your businesses bottom line and can potentially minimise the overall cost of your workers compensation program. If the sound of understanding your key drivers to premiums has you feeling overwhelmed, the consultants at Safe Scope are here to help.

Contact them today for an obligation free consultation at www safescope au/contact-us/ or 1300 776 327.