Here is Why.

The California Worker’s Compensation Insurance Rating Bureau (WCIRB) has changed how they calculate your company’s Experience Modification (X-Mod) effective January 1, 2017.

Old Calculation.

Prior to 2017, the first $7,000 reserved on any claim (the primary threshold) fully counted against your business.  The remaining reserves counted slightly (the excess threshold). For a worker’s comp claim of $25,000, 100% of the first $7,000 of this claim counted against you. Then, roughly 10% of the remaining $18,000 also counted against you, for a collective total of $8,800 (keep in mind the calculation varies based on the size and type of your business). This claim would have contributed roughly 10 points to your X-Mod.

New Calculation.

Starting in 2017, there is a single threshold, and it was changed from a fixed $7,000 amount to a variable amount (ranging from $4,500 up to as much as $75,000). This threshold is based on your company’s industry and size of payroll. Using the above-mentioned $25,000 claim, your threshold amount likely increased from $7,000 to roughly $20,000. Now, 100% of this $20,000 threshold counts against you. The claim now contributes roughly 25 points to your X-Mod under the new calculation.

That is a whopping 15 Point swing on the cost of your Workers’ Compensation Premium!

As a Workers’ Compensation Specialist, DHW Insurance Brokers has unique strategies to offset the spike in the cost in your Workers’ Compensation Program. If you would like to know more about our strategies or how this formula change impacts your business’s bottom line, feel free to reach out to:


At DHW you’ll immediately experience why we’re different.

It’s our Dedication, Heart and Wisdom that we bring to every client relationship. We’re your partners in protection, prevention and risk management. In fact, we’re the last insurance brokerage you’ll ever need.

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