Workers Compensation Premiums in California are based on a classification scheme that consideres the dangers of a particular business or occupation as well as the duties and functions of a particular job.
The past safety record of the employer is also considered.
The Insurance Commissioner does not set the actual premiums to be paid by the employer, but every WC insurer needs to develop rates based on some classification system of job risks and safety data. The system developed by the insurance commissioner can be utilized by a given Workers Compensation Insurer but an insurer can also use their own privately developed rating system.
There are over 500 Classification Codes found in the Uniform Statistical Reporting Plan (USRP). The Insurer may use this rate per $100 of pay to determine, in part, the premium that an employer must pay.
The above rate may be modified by an experience modification under the regulations of the California Experience Rating Plan (CERP).
The experience rating modification is based on the employers past record of workers injuries, considering both frequency and severity.