Work comp insurance, as it's commonly referred to, in short, covers medical and rehab costs suffered by workers who become injured on the job or even by those performing job related tasks whether on or off the clock sometimes.
In addition, work comp also covers a worker's lost wages and pays death benefits to dependents of those killed in such work related accidents.
All workers compensation programs vary by state; but even more fluctuating are the rates! The work comp rates depend on performance (also known as "combined ratios") of those programs in each of those states as follows.
Calendar year results are a measure of claim payments and variances (or changes) in reserves (dollars set aside for future expected payment needed on those claims) that are set for accidents which occur in that particular year or earlier. Accident year results reflect simply those losses in that year and many believe paint a more accurate picture of the workers compensation industry's overall performance at that time.
Regardless of how you prefer to measure and evaluate it, it's important to understand that work comp is a highly claims-driven line of insurance. To the extent that claims go up, work comp rates rise to reflect, and attempt to absorb that increase. And as claims fall, so do workers compensation prices become cheaper eventually.
Work place safety awareness, loss prevention, and active claims mitigation are all very good steps that companies can take to help reduce their workers compensation rates and keep them from going up.
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