Oregon Workers Compensation Rates

The cost to Oregon businesses in the assigned risk plan is higher because they don’t have access to the discounts and choices available in the voluntary market. More competition in the voluntary market drives lower rates.

Your Oregon workers compensation rates are not determined by employee count but gross payroll. The more payroll you have the larger your workers compensation cost.

The policy premium is based on an estimated payroll exposure and is considered to be a deposit. Shortly after the policy expires, your actual exposure during the policy period will be determined by an audit. After the audit of your workers compensation policy is completed by your insurance carrier they will prepare and send to you a Final Audit Statement.

This statement will indicate any additional premium you owe or any credit you will receive due to the payroll adjustment as determined by the audit. You can expect to receive the audit billing statement usually within three months after the end of your workers compensation policy period.

Your Oregon business is assigned rates according to industrial categories called classifications. Classifications are tied to risk factors. These risk factors have a calculation of the potential for loss within a particular industry. There are close to over 800 risk classifications.

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’s 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

A company called the National Council on Compensation Insurance (NCCI) collects premium and loss data from most insurance carriers for most business types. They then take this data and produce a calculation that compares your actual losses to the average losses of businesses like yours in the same job classification or class code. This calculation is called your “Experience Modification” or “Rate Factor”.

An experience mod above a 1.0 is higher than average (higher than 1.0 is surcharged). Low losses = lower experience modification.

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, 2018, your experience modification probably would include claims from June 1, 2014 to June 1, 2017. 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:

  It provides an incentive for loss prevention and implementation of safety programs by your business.

  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.