Big news is on the horizon as the Kentucky Department of Insurance has announced the approval of 2022 loss costs filing, which is used to develop workers comp rates. That’s a whole lot of mumbo-jumbo you don’t understand. Insurance is confusing. Let’s talk about what this announcement means for your business and what you can expect to pay for insurance. For this video, we’re going to talk about Workers’ Comp Rates in 2023.
I am Adam Sheridan with Reed Brothers Insurance, and one area of insurance we focus specifically on is workers compensation. From one-man shops to businesses with hundreds of employees, we’ve built insurance programs for each level of your business.
So…did you see the news about the decrease in workers comp costs?
Decrease in Workers’ Comp Loss Costs
Yep, it’s true. The Kentucky Department of Insurance has approved a 6.8% decrease in workers’ comp loss costs for 17 STRAIGHT YEARS! If you’re watching this, you’re likely a business owner. You don’t care what loss cost are, but let’s quickly break it down. To keep it simple, loss costs are the costs an insurance company expects to pay to cover a claim. Office workers are low risk for workers comp claims. So that cost is much lower than say a big manufacturing company where employees work with large pieces of equipment.
Will Your Workers’ Comp Rates Go Down?
Now let’s get to what matters. What does this mean for you as a business owner? Does it mean that you’re guaranteed to have your workers’ comp premium decrease next year? Not necessarily.
Kentucky is a VERY competitive marketplace when it comes to insurance companies that offer workers comp coverage. All of these companies will use this approved “loss cost” to factor into their loss cost multiplier and in the end, rates they offer you the business owner.
Long story short, as far as your base rate is concerned, there’s a good chance you will see that rate decrease. However, depending on your workers’ comp company, your base rate may stay stable or even increase.
Does This Impact Every Business?
This point is something to remember, typically for businesses that pay $5,000 or more annually in workers comp premiums. If you’ve had any claims in the past 3-5 years, then your experience modification factor is still going to play a large role in the premium you pay. Has your business experienced an uptick in claims? While this announcement from the Department of Insurance may help offset the overall increase in your premium, you’re still likely to see an increase. If this sounds like your business, then we need to schedule some time to talk.
Next Steps
If you own a business, have employees in Kentucky, and have more questions about your workers’ comp insurance program, call us at 606-679-6311 or email me at asheridan@rbisomerset.com. Check out our other videos for your business. You can find them here on our website or on our YouTube channel.
We look forward to working with you.
