Standard Premium – Workers Compensation Rating Element

What is the standard premium when used in workers compensation rating?

Standard Premium is one of the five premium types as used in rating a workers compensation policy. It’s made up of a series of steps or rating element factors. It’s a term generally used only by those in the workers compensation business who have a function in the rating of a policy.

Standard Premium includes:

  • All elements of the Manual Premium which are; payroll divided by 100 x rate; Supplementary disease loading; US Longshore & Harbor Workers exposure for non F classes. I’ve described these items in a previous post.
  • Waiver of Subrogation Factor – An endorsement to the policy, premium is based on a charge set by the insurance company. Different rules apply to standard and assigned risk policies as well as application of minimum premium issues and may incur different costs for this endorsement depending on specific circumstances.
  • Increased Limits Factor for Employers Liability – This is a factor applied to the manual premium when an employer requires the increase of the standard employers limits under Part Two – Employers Liability- of the workers compensation policy.
  • Increased Limits Charge for Employers Liability – Increased limits for Employers Liability are available in a standard workers compensation policy at an additional charge added to the Manual Premium.
  • Increased Limits Factor for Admiralty and FELA Employers Liability- A factor determined from the Table for Increased Limits and applied to the total premium for Admiralty and FELA classes. 
  • Flat Charge for Employers Liability Voluntary Compensation – A charge the insurance carrier files for this exposure that must be added to the total premium.

It’s these items that make up the Standard Premium on a workers compensation policy. While not the final premium an employer pays it is the second step of five in the rating process.

Hope this helps you out! Thanks!