WC Glossary

A.M. Best Rating – financial strength rating measuring insurance companies’ ability to pay claims and meet their obligations.
Captive Agent – an insurance agent working exclusively for one company.
Carrier – an insurance company that actually underwrites and issues the insurance policy. The term is used because the insurance company assumes or carries the risk for policyowners.
Class Codes – Classification codes (workers compensation codes) are a primary part of the workers compensation pricing mechanism. Workers compensation codes are a complicated compilation of job definitions designed to accurately identify various workplace exposures. Each specific job classification is assigned a four-digit number which is then used throughout the workers compensation system. Each workers comp code has its own rate for the purpose of calculating workers compensation premium.
Declaration Page – the contract section of a policy containing such information as name, description, and location of insured property; name and address of the insured; period a policy is in force; premiums payable; and amount of coverage.
Effective Date – the date that policy coverage begins. The policy is generally effective for one year from this date.
EMOD – experience modification formula, the "experience mod," is a numerical expression of a company's accident and injury record compared with the average for the firm's industry. This E-mod is calculated using payroll and loss data for the oldest three of the last four years. Loss data includes paid claims as well as a "reserve" for all outstanding claims.
Experience Rating – A method of calculating group insurance premium rates by which the insurer considers the particular group’s prior claims and expense experience.  
Expiration Date – The date on which policy coverage ends; the last day before the policy expires.
Independent Agent – an insurance agent who can sell policies from many companies.
Loss Cost Multiplier – A multiplier insurers use to account for individual company expenses, underwriting profit and contingencies, in order to arrive at final rates.
Loss Runs – an insured’s insurance history at a glance; it shows past losses as well as open case losses. This report will state the time and the carrier along with other pertinent information.
NCCI - National Council on Compensation Insurance, is an independent advisory organization, who developed and maintains the workers compensation classification system as used in most states.
NSC – The National Safety Council is recognized as the leading U.S. organization focused on safety in the work place.  Workers Compensation For Less has partnered with the NSC to bring the best thinking about workplace safety delivered electronically to our insured.
OSHA – The Occupational Safety and Health Administration is an agency of the U.S. Department of Labor.  Their role is to promote a safe and healthy workplace to employers.  The set and enforce standards as well as provide training and education.
Policy – The written contract of insurance.written agreement that puts insurance coverage into effect.
Premium – The amount of money an insurance company charges for insurance coverage. To arrive at an initial estimated premium, each type of job is given a classification code and a premium rate expressed in cost per $100 of pay.
Quote – An estimate of the cost of insurance based on information supplied to the insurance company by the applicant.
Rates – The cost of a unit of insurance, usually per $100. Rates are based on historical loss experience for similar risks and may be regulated by state insurance offices.
Renewal Date – date the policy renews for the next policy year.
Risk – uncertainty of a financial loss; term used to designate an insured or a peril insured against.
SIC – Abbreviation for Standard Industrial Classification. Each 4-digit code represents a unique business activity. 
S.T.A.R. Safety Program – The exclusive safety programs developed by the National Safety Council and Workers Compensation For Less. The S.T.A. R. Programs are used by employers in our targeted industries and are personalized by each employer to best fit their company.
State Regulators – elected or appointed state government officials who along with their departments and staff, regulate the conduct of insurance companies and agents in their respective state or territory. Their offices are responsible for regulation, compliance and enforcement of statutes related to the business of insurance.
Workers’ Compensation Insurance – Insurance that pays for medical care and physical rehabilitation of injured workers and helps to replace lost wages while they are unable to work. State laws, which vary significantly, govern the amount of benefits paid and other compensation provisions.