Understand key terms to decode your work comp policy.
The workers compensation insurance industry can have a language all its own. Here are some key terms you need to know.
Topics
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
A
Audit
A process that reviews your financial and payroll records at the end of your coverage period. The purpose is to ensure your premium reflects your actual payroll amount.
C
Certificate of Insurance
A certificate proving your workers compensation is valid and currently protecting your employees. It shows the name of the certificate holder, the policyholder, insurance company, policy number, type of insurance coverage and policy effective dates.
E
Experience modification factor (e-mod)
One of the primary measurements used to determine what you pay for coverage. An e-mod less than 1.0 will reduce your premium. An e-mod greater than 1.00 will increase your premium.
F
Fraud
Involves blatantly false statements or representations to obtain or deny any benefit. Workers compensation fraud can come from various sources, including employers, employees, agents, etc.
First report of injury
A form filed within 30 days by an employer or their work comp insurance carrier upon report of a worker’s injury or illness.
G
Gross wages
Gross wages can include any pre-tax deductions; salary, hourly, commission, bonus, piecework, overtime pay, vacation, holiday, sick, incentive pay, housing, and car allowance, whether in money or otherwise.
L
Lost time
Occurs when an injured worker is out of work longer than the state-mandated waiting period.
Loss ratio
Total losses, or claims expenses, divided by the audited premium.
M
Modified duties
Tasks an injured worker can complete with restrictions provided by the authorized treating physician during recovery.
Medical only
Describes a claim where a worker is injured, but does not miss any time on the job, and the only payments made are for medical costs.
P
Premium
The dollar amount charged for coverage based on payroll calculated on applicable classification codes and rates.
Payroll
Money or substitutes for money, payable by the employer for services of individuals who could receive workers compensation benefits.
R
Remuneration
Includes wages, commissions, bonuses, overtime pay, holiday pay, vacations and sicknesses, payment for piecework, value of housing, cafeteria plans and other forms of compensation.
S
Subcontractor
A person or business who performs a job or service for another business, often as part of a larger contract or project.
T
Transitional duty
Modified duties or assignments given to a recovering injured worker as part of their transition back to work, which takes their injury and any medical restrictions into consideration.
V
Voluntary audit
A voluntary audit is when an audit is closed using the estimated payroll figures initially provided by your agent.
