Workers’ Compensation Insurance in Utah

Base premiums

Utah requires insurers to use a standard set of classification codes for different occupations when determining the likelihood of injury or illness for a profession. That risk value and the employee’s yearly payroll amount is then used to calculate the base cost of the premium.

Let’s look at an example. A construction worker in Provo, Utah has a job that is potentially quite hazardous. Let’s assume that risk multiplier for this occupation is 7.54% (compared to a hypothetical risk multiplier of 3.25% for a food service job). We then take that base rate and multiply it by the yearly payroll for that employee, divided by 100.

BASE RATE % x (PAYROLL/100)

In this example, if the construction worker makes $80,000 a year, the calculation becomes:

7.54 x (80,000/100)

Which equates to a yearly premium of $6,032 for the employee. (Note that these values are examples only and that you must contact an insurer for accurate calculations for your business.)

Insurers may also apply modifiers to either raise or lower your base premium by reviewing the number of previous claims you have filed, the rate of accidents on the job, and the presence of safety programs.

Safety programs

If you prevent accidents at your workplace, you will reduce your insurance premiums. The Utah Labor Commission recommends that every company establish a safety training program for its employees. To get started, call (800)-530-5090 to schedule a free consultation appointment with the Utah Safety and Health Consultation Program.

Number of accidents and claims

As with auto insurance, the number of claims you have submitted directly impacts the price of your insurance premium. Expensive claims can also impact your premiums. The Utah Labor Commission recommends that employers work closely with an injured employee to ensure that they’re getting proper care. In addition, helping the employee return to work on light duty tasks can also reduce your premiums while also helping you retain a valuable employee.

“Research indicates that employers who routinely do only one thing—call injured employee right away and ask, ‘How are you doing? Hope you get back soon’ —reduces disability claims by 21 percent.