A workers' compensation policy premium is calculated using a standardized actuarial formula based on three primary variables: your business classification code (reflecting industry risk), your total gross payroll divided by 100, and your Experience Modification Rate (EMR). The formula multiplies payroll per 100 dollars by the advisory pure premium rate assigned to your classification, and then applies your EMR modifier—which scales your premium up or down depending on whether your past injury frequency is better or worse than industry averages.
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