What Are ‘Loss Costs’?
A loss cost is the baseline (typically variable) rates that insurance companies use to determine a company’s premiums. Several variables influence what the loss costs for workers’ comp insurance will be. These variables include:
- The number of workers’ compensation claims for the year
- The duration it takes to settle the case
- The severity of injuries a worker suffers
- The overall cost(s) of the medical treatment required for the victim
No raise in workers’ compensation insurance premiums is welcomed news for many Colorado employers, especially those who have considered making cuts and/or keep their insurance costs low this year.
In the previous two years, premiums went up; therefore, many employers were likely bracing for a repeat. In fact, 2014 saw a 2.6% increase from 2013, and 2013 saw a 5.2% increase from the year before.
While most employers can expect to see no increase, the state insurance agency couldn’t rule out this break for everyone. They stated that some industries could see an increase based on their industry classification. They also added, however, that any increase would remain flat across classes.
The Colorado Division of Insurance contributes the lack of premium increase to employers being able to give their injured workers adequate support so that they were able to return to their job(s) quicker.
According to Insurance Commissioner Marguerite Salazar, “These results come down to the efforts made by employers and employees to control workers’ compensation costs. Getting injured workers back to work sooner, meaning that claims are closed faster, helped offset a small increase in claim costs, resulting in no change to loss costs.”
If you’ve been hurt on the job and need help negotiating with your employer in order to receive the compensation you deserve, contact Babcock Law for a free consultation. We also encourage you to browse our firm’s blog and knowledge center.