Worker’s compensation insurance premiums continue to rise in Colorado, but at a slower pace.
The Colorado Division of Insurance announced that the “loss costs” component of workers’ compensation insurance premiums will increase 2.6 percent for 2014, half the 5.2 percent hike for 2013.
The 2014 increase will mark the fourth straight year of higher loss costs in Colorado. Before that, loss costs had not increased in more than a decade.
“Increasing claim costs and increasing frequency of claims continue as trends. However, Colorado employers and employees continue to improve safety and reduce losses,” said Marguerite Salazar, commissioner of insurance.
Loss costs take into account the average cost of lost wages and medical payments of workers injured on the job. Loss costs are one factor used in establishing workers’ compensation insurance premiums for each employer.
The National Council on Compensation Insurance, a rating and advisory organization, determines loss costs based on annual data on workers’
compensation claims. Colorado insurers use NCCI loss costs as a base and then add their own expenses to determine the rates they charge employers. Consequently, premium changes differ for each employer.