Oregon Workers Compensation Insurance Rates
Because worker’s compensation insurance is mandatory, your Oregon business must be able to purchase workers compensation insurance. Some insurance companies regard some kinds of businesses a greater risk than others, these might include new businesses because they have not yet established a safety record, businesses that have poor claim histories and those that involve hazardous work.
Oregon businesses that have been unable to find a willing insurer in the open or general market (called the voluntary market) are placed in the assigned risk market, which is known as “the pool”. The pool is actually divided into two pieces; direct assignment and the pool.
The workers’ compensation system aims to distribute the costs of the program fairly among all employers. The following factors will influence your workers compensation insurance rates:
Since the premium is based in part on payroll which is estimated at the beginning of the policy year, the final premium could be more or less, depending on your actual payroll expenses reported at the end of the year. Adjustments are made at that time, resulting in either a refund or an additional bill. In order to provide you with a workers compensation insurance quote we will need to know your total payroll, for each class code that has been assigned.
The classification covers all employees of the business, except for classifications called standard exceptions, involving occupations common to many businesses. These include clerical, office and drafting employees, drivers, chauffeurs and their helpers, outside sales people, collectors and messengers.
There is an established minimum premium which varies according to employer classification. It is the lowest premium an insurance company will accept to provide worker’s compensation insurance
The experience modifications are built up over a three year period, and often the last year is not included. So, for a policy renewal date of June 1, 2008, your experience modification probably would include claims from June 1, 2004 to June 1, 2007. If your business has better experience than the average business in your classification you would receive a premium credit.
The benefits of experience rating are:
Provides an incentive for loss prevention and implementation of safety programs by the employer.
The premium for each insured reflects the individual insured’s experience and should be a better indication s of the costs of future losses than the average rate for the classification.
Accident Frequency: Frequency is a measure of how many accidents a business has had during the experience period.
Accident Severity: Severity measures the cost of any accidents that have occurred.Accident frequency is a better indication of future losses and is the more important of the factors when it comes to the rating.