The state rate is multiplied times the eligible payroll. The product of the rate times the payroll is then multiplied times the insured's individually assigned experience modification . An experience modification can either reduce or increase the final workers' compensation premium depending on the insured's prior loss history. An errant experience modification can cause an insured to pay too much for their workers' compensation premium. CRIB uses three years of loss and premium information to calculate each insured's experience modification.
Errors can occur resulting in a higher experience modification then is deserved.
Many workers' compensation policy holders do not realize that there are geographic limitations placed on them. If you fail to notify your insurer of the new state in which you operate prior to your next workers compensation renewal, you will have no coverage in the new state in the new policy term. However, employees who work from their home are considered to be working in the state of their home office. This newsletter presents an overview of a general New Jersey workers' compensation policy. Please review your current policy for actual contract terms.