Experience Rating
Experience rating is a workers' compensation insurance mechanism that adjusts an employer's premiums based on their actual claims history relative to their industry group average.
What Is Experience Rating?
Experience rating compares your organization's workers' compensation claims costs against the average for your industry. If your claims are lower than average, you receive a premium discount (surcharge credit). If higher, you pay a surcharge. This creates a direct financial incentive to invest in workplace safety.
How It Works
- Each employer is assigned an industry rate group with a base premium rate.
- Your actual claims costs over a defined experience period (typically 3-5 years) are compared against expected costs for your rate group.
- A merit or demerit factor adjusts your premium up or down.
- Both claim frequency and claim severity affect the calculation.
Reducing Your Experience Rating
- Invest in proactive safety programs to prevent injuries.
- Implement effective return-to-work programs to reduce claim duration and costs.
- Report and manage claims promptly to prevent cost escalation.
- Track leading indicators to identify and address risks before they become claims.
See Your Safety ROI
Make Safety Easy helps you reduce claims through better incident prevention, faster reporting and effective return-to-work management. See your projected premium savings on the ROI & Stats page.