WORKERS COMPENSATION There are two components to workers compensation claims costs: payments for lost income (which are usually linked to a state’s average weekly wage), known as indemnity costs, and payments for medical care. Two decades ago indemnity costs made up the greater part of total losses. In 1985, for example, indemnity represented 56 percent of the total. By 2005 indemnity and medical had changed places. Indemnity was only 42 percent of losses.
WORKERS COMPENSATION INDEMNITY COSTS PER CLAIM, 1991-2005 (1) ($000)
(1) Indemnity costs per lost-time claim. 1991-2004: Based on data through 12/31/2004, developed to ultimate; based on the states where NCCI provides ratemaking services. Excludes the effects of deductible policies.
(2) Preliminary based on data valued as of 12/31/2005.
