Decreasing Workers’ Compensation Premiums
Increasing loss ratios
One factor that insurance companies use to underwrite your contractors Workers’ Compensation insurance 
policy is loss ratio. Simply put, your loss ratio is the dollar amount of losses divided by premium. A contractor with a loss of $10,000 who paid $20,000 in premiums would have a loss ratio of 50%.
Within the last few years, we have seen a drastic drop in contractors’ payrolls. Given that trend, the same contractor with a loss of $10,000 might only be paying a premium of $10,000. His loss ratio would now be 100% and the risk would be much less attractive to underwriters.
Current losses can cost you much more if you have less payroll than in past years. One recommendation is to not cut back on your safety program. Investing your time and money in a safety program will protect you and your business in the long run. Make sure your safety program is current kept up to date.