Classification Base Rating is the Basis of Experience Rating

The premiums charged to a firm should reflect the costs that the firm is expected to add to the workers compensation system. However, most firms do not have enough data to precisely estimate their future workers' compensation insurance costs. Because of this, L&I pools the work performed by the firm into one or more risk classifications and then determines a benchmark statewide rate, the Base Class Rate, for each classification.

Every workers' compensation jurisdiction classifies firms by the type of work performed. Washington is no exception as RCW 51.16.035 ( requires L&I to "classify all occupations or industries in accordance with their degree of hazard and fix therefor basic rates of premium."

The current Base Class Rates are shown in:

The Base Class Rates are the benchmark future insurance costs per unit of work for each classification, but they may not fully reflect the future costs for a particular firm in that classification.

Experience Rating is an adjustment to the Base Class Rates, through the Experience Modification Factor, to charge each individual firm for the future costs they are expected to add to the workers compensation system.

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