Claim-Free Discount Examples (Class 0510 Wood Frame Building Construction)

This is an example and may not reflect the actual numbers associated with your business.

These examples show how one time-loss claim can raise workers' compensation rates for an employer in class 0510 that is currently under the claim-free discount.

The rates are based on the 2010 workers' compensation rates per hour worked.

Example 1

No compensable claims (claim free)
  (a) (b) (c) (d)
  Actual Losses Expected Losses Credibility Weight Credible Estimate
Primary - 20,214.08 55.00% 9,096.34
Excess - 22,252.48 8.00% 20,472.28
Total - 42,466.56 - 29,568.62

Computed Experience Factor 29,568.62 (Credible Estimate) divided by
42,466.56 (Expected Losses)
equals 0.6963
Claim-Free Experience Factor     0.6200
Prior Experience Factor     0.6200
Final Experience Factor     0.6200

Example 2

One compensable claim at $5,000
  (a) (b) (c) (d)
  Actual Losses Expected Losses Credibility Weight Credible Estimate
Primary 5,000.00 20,214.08 55.00% 11,846.34
Excess - 22,252.48 8.00% 20,472.28
Total 5,000.00 42,466.56 - 32,318.62

Computed Experience Factor 32,318.62 (Credible Estimate) divided by
42,466.56 (Expected Losses)
equals 0.7610
Claim-Free Experience Factor     0.6200
Prior Experience Factor     0.6200
Final Experience Factor     0.7610

Example 3

One compensable claim at $40,000
  (a) (b) (c) (d)
  Actual Losses Expected Losses Credibility Weight Credible Estimate
Primary 28,662.64 20,214.08 55.00% 24,860.79
Excess 11,337.36 22,252.48 8.00% 21,379.27
Total 40,000.00 42,466.56 - 46,240.06

Computed Experience Factor 46,240.06 (Credible Estimate) divided by
42,466.56 (Expected Losses)
equals 1.0889
Claim-Free Experience Factor     0.6200
Prior Experience Factor     0.6200
Final Experience Factor     0.7750

See the Claim-Free Discount page for more information.

Call your Account Manager or local L&I office for more rate information.

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