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Loss Costs on the Rise (Again) for Colorado Workers

On Behalf of | Nov 14, 2011 | Workers' Compensation |

The amount that employers in Colorado pay for the “loss costs” portion of workers’ compensation premiums will increase in 2012. After nearly a decade of decreasing loss costs premiums, the last two years have seen the Colorado Division of Insurance raise premium amounts. In 2011, loss costs premiums were raised by 3.4 percent and in 2012 premiums will be raised an additional 3.7 percent.

The average cost of medical payments and lost wages for workers injured on the job, according to, loss costs reflect the expected costs to insurers and are determined by a ratings organization – all Colorado insurers uses loss cost numbers calculated by the National Council on Compensation Insurance (NCCI). Loss costs are not rates, but rather a base that is used to help insurance companies calculate the rate to be charged. To arrive at the price of the rates charged to employers for workers’ compensation, insurance companies add the NCCI loss costs to their expenses.

As described by, there are a number of factors that may influence the price of workers’ compensation costs, including:

  • Severity of the injury suffered
  • Length of claim for the injury
  • Seriousness of the injury
  • Number of injuries suffered per number of workers
  • Medical costs to treat the injury
  • Total costs to cover workers’ compensation claims

Speaking about why the Colorado Division of Insurance chose to raise loss cost premiums, Jim Riesberg, Commissioner of Insurance, stated that “[w]hile the number of claims has remained relatively flat over the last year, medical costs continue to increase, and this has led to the need for an increase.” He continued, “[The Colorado Division of Insurance’s] analysis indicates a slight increase is required to ensure workers’ compensation premiums remain adequate.”

If you have questions about loss costs and what the increase may mean to you as a Colorado worker, please speak to an attorney knowledgeable in workers’ compensation matters for more information.

Source: Colorado Workers’ Compensation Loss Cost Rates To Go Up In 2012


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