The workers' compensation experience modifier is typically based on how many years of loss experience?

The workers' compensation experience modifier is typically based on a three-year period of loss experience. This three-year period, often referred to as the "experience rating period," includes the current year and the prior two years. This timeframe is used to determine how a company's claim history compares to that of similar businesses in the same industry, helping to assess the risk of providing coverage for that entity.

Employers with fewer claims than average might receive a lower modifier, which can reduce their workers' compensation premiums, while those with a higher-than-average claim history may see an increase in their modifier, leading to higher costs. This system encourages workplace safety and efficient management of worker injuries, as companies benefit from lower rates if they maintain a safer work environment.