Factors influencing your premium
Work Health Options (WHO) constantly places workers compensation insurance cover for employers in all jurisdictions. Our national team can provide all the advice you require including:
- Understanding your business and structure
- Reviewing your classifications in all States and Territories
- Premium projections
- Advising of liability exposures
- Setting up national insurance programmes and agent/insurer tenders
- Negotiating rates in risk states (ACT, NT, TAS & WA)
- Minimising premiums in managed fund states (NSW, WorkCover QLD, SA & VIC)
- Education and training on premium calculations
- Wages Definition
- How claims decisions impact premiums
- Providing advice on the impacts as your business grows and develops
- Impacts of acquisitions and mergers
- Premium funding
- WorkCover appeals and retrospective adjustments
- Self Insurance and Retro Paid Loss advice
Calculation of workers compensation premium
Unfortunately every State and Territory is calculated differently depending on the jurisdiction. Your workers compensation insurance premium is based on a number of factors including:
- industry/industries in which you operate
- amount of wages you pay your workers involved in each industry
- costs of any claims made by your injured workers over the past three to five years depending on jurisdiction
- various levies apply based on the jurisdiction
WHO can give advice on all of the above areas to make this process simple and easy to understand, whilst projecting the impact claims can have on your premiums.
Information required for premium calculation
Employers will be asked to complete a declaration of estimated wages form at the beginning of your policy year, and a declaration of actual wages form at the end of your policy year.
Your premium will then be calculated twice during each policy period:
- The initial premium – called the estimate premium – is calculated at the beginning of the policy period, based on an estimate of wages you are likely to pay during the policy period.
- The final premium – called the hindsight premium – is calculated at the end of the policy period, using the actual amount of wages you pay during the policy period.
If your estimated wages vary considerably, WHO can assist prior to renewal to amend these accordingly. Please note, in some jurisdictions, should your wages substantially increase during the policy year, you may be penalised if you fail to notify your insurer/agent within a specified time frame.
Influences on workers compensation premium
Obviously wages are a variable component in relation to premium however for certain employers the cost of claims lodged by their injured workers will also have an impact. Conversely should claims be low or nil you can receive a discount accordingly. These claims will impact the premium calculation for a period of three to five years, depending on your jurisdiction.
WHO can become part of your team and assist in reducing this cost by achieving:
- a safe workplace with effective Workplace Health and Safety Initiatives
- an active involvement in the injured worker’s return to work, from early intervention
- to proactive return to work strategies, including constant communication with the GP
In ACT, NT, TAS and WA, by assisting in the above activities, WHO can negotiate your premium as well as structure your insurance programme.
In NSW, QLD, SA and VIC, although the premium is regulated by certain formulas, WHO can assist in minimising claims to give discounts and monitor data integrity in regards to the various formulas.
WHO works with employers in achieving a positive result in relation to placement, pricing and coverage where applicable. Our effective and efficient claims management and return to work structure can also have a dramatic impact on premiums.