What are Workers Compensation Dividends?
A Workers Compensation Dividend plan is a partial return of premium based on the insurer’s financial performance or on the insured’s own loss experience. Dividends may fall into two categories: Flat Dividend and Sliding Scale Dividend. A Flat Dividend is a policyholder dividend paid to the insured as a flat percentage of the premium. The Sliding Scale Dividend is a rating plan that pays a dividend to the insured on a loss sensitive basis. Sliding Scale Dividends are paid based on the ratio the final audited premium bears to the total incurred losses of the insured for the specific policy period. Since losses may stay open for several years after policy expiration, periodic dividend adjustments are made after the initial reconciliation.
To understand how the dividend is factored into your Workers Compensation premium calculation, visit our Workers Compensation premium estimator and sample calculation.