Workers Compensation Insurance in Pennsylvania

Generally, workers comp. insurance is necessary for all employers who have at least one full-time or part-time employee. If you have “sub-contractors” or 1099 employees, you may still need to coverage. These subs can be considered employees, making you responsible for injuries occurring on the job. It is best to talk to a Risk Averse agent about your specific situation to determine if you need to carry coverage.

Frequently Asked Questions:

Why does my Workers Compensation policy have an ESTIMATED premium?

Work comp insurance premiums are determined based on your actual payroll. Because most companies are not sure exactly what their payroll is going to be, the insurance company estimates your premium based on your estimated payroll. At the end of the policy term, the company will audit your payroll. If actual payroll was less than estimated payroll, you would get a refund. If actual payroll is more than estimated payroll, you would owe the insurance company money.

Will my Workers Compensation policy be audited every year?

Yes, in PA work comp insurance is audited every year. The extent will likely depend on how much you pay in work comp premium.  For smaller policies, insurance companies will just send you a form to be completed and returned with payroll records. For larger work comp policies, an auditor may come to your location and go through your books with you.

What is an Experience Modifier?

PA work comp rates are determined by the state (base rate). The insurance company then applies a multiplier to that base rate in order to determine the rate you pay. Once several criteria are met, the state of Pennsylvania will give you an Experience Modifier.  The Experience Modifier represents the discount or surcharge that will be applied to your premium.  For example, if you have had no Work Comp claims for the past 10 years, you might have an Experience Modifier of .80.  This means you would get a discount of 20% on your work comp rate.  Another company might have two work comp claims, so the state gives them an Experience Modifier of 1.25. This company would have a 25% surcharge applied to its rate.