Workers’ compensation insurance rates expect decrease

The Insurance Commission announced that effective December 1, 2022, rates for workers’ compensation insurance will decrease for the sixth consecutive year. Both the voluntary market and the residual market will see tariff reductions in the double digits.

“Reducing the cost of workers’ compensation will help our local businesses, which have faced several years of uncertainty and economic hardship due to the pandemic,” Insurance Commissioner Trinidad Navarro said in a press release. “It also helps us attract new businesses and jobs to our country. As costs continue to fall, organizations are staying on top of the game by reducing risk through programs like our Workplace Safety initiative.”

This year’s fall in workers’ compensation rates is expected to coincide with the reversal of voluntary and residual market trends – the residual market is expected to see a larger rate decline. Residual insurers provide the “last resort” for companies that cannot obtain or afford coverage in the traditional market. In general, rates on the residual market do not fall more than on the voluntary market, as the customers are usually companies with a higher risk or claims history. The drop in the residual market is an indicator that these policies are being used less as companies can better afford the traditional voluntary market.

Workers’ Compensation Insurance provides coverage if an employee is injured on the job and can provide medical care and lost wages payments if an individual is unable to work because of their injury. Lower awards do not change the amount of compensation an injured employee receives.

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Final rates are expected to be announced in early November after independent actuaries reviewed the Delaware Compensation Rating Bureau’s (DCRB) application and conducted a public hearing with the DCRB and the state’s Ratepayer Advocate. Actual savings vary by policy.

These lower rates are just one component of several efforts by the department to provide financial support to businesses. More than 1,200 employers are saving even more money on their worker’s compensation premiums by participating in the department’s occupational health and safety program, saving approximately $7.4 million last year. Eligible companies can receive up to 19% discount on their insurance by successfully undergoing annual safety inspections and following recommendations. Importantly, employees can also benefit directly from employer-based safety goals – for example, a workplace can offer bonuses if there are no injuries over a specified period and pass the savings on to employees.

Organizations that are eligible for the Occupational Health and Safety program are notified each year seven months prior to their renewal date. Organizations interested in participating can access questionnaires online and contact [email protected] to begin the process. For the first time in 20 years, the ministry will update the inspection fee table for program participants. Companies will be informed accordingly. Participation can only bring benefits, non-qualification cannot be the basis for premium increases or sanctions by other security authorities.

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