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Guide to Workers' Compensation Insurance

Part 3: The Cost of Workers' Compensation Insurance


Because the rules for mandatory registration differ depending on where your business is, I've put together a list of sites with Workers' Compensation insurance registration information for each province or territory.

Some of these sites allow online registration for Workers' Compensation insurance. Whether they do or not, they all include a lot of information to make dealing with Workers' Compensation insurance easier for employers, such as fact sheets and Employer Handbooks.

The Cost of Workers' Compensation Insurance

The cost of Workers' Compensation insurance depends upon what industry category your business is in. All the WCBs classify businesses according to the industry in which they operate, because it's assumed that businesses with similar operations share similar risks.

When you first register with the WCB, you have to supply a complete description of your business operations to determine your industry category. The rates for Workers' Compensation insurance are calculated per $100 of insurable earnings.

There's quite a difference in the average premium rates between provinces. In 1999, for instance, Alberta had the lowest premium rate at $1.05 per $100 of payroll. The second lowest average assessment rate for 1999 was the Northwest Territories, at $1.21.

Meanwhile, at the other end of the scale, Newfoundland's 1999 average assessment rate was $2.99, followed by Nova Scotia with a 1999 average assessment rate of $2.54 (Association of Workers' Compensation Boards of Canada). Since these statistics were compiled, the rates have gone up.

All WCBs use a performance-based pricing system, which will also affect the cost of your premiums for better or worse. On the positive side, employers who reduce the number of accidents and injuries in their operations pay less. The downside is that employers with poor accident and injury track records pay higher premiums.

This experience plan means that you can earn discounts on your Workers' Compensation insurance premiums over time. Some provinces, such as Alberta, provide even more incentive; you can earn an additional discount of up to 20% by participating in the Partners in Injury Reduction program.

The Advantage of Being Covered

Registering with the WCB and paying Workers' Compensation insurance premiums are definitely not among most business people's favorite activities, but they are necessary. Think of what could happen to your business because of even a single judgment for a work-related injury. The WCB insurance programs provide employers with protection, allowing them to pool the risk and share the cost.

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