There are basically two sets of claims that impact on your WorkCover premiums:
• Your claims
• Claims from other businesses in your industry
Your claims (some of the do, all of them can)
Each year, WorkSafe will calculate your premium based on three factors (as discussed here). Your claims performance is one of those factors. Historically, WorkSafe have used the last three years of claims to assess your performance. More recently it has been the last two and a half years. For the 2018/19 premium year, they use claims reported between 1 January 2015 and 30 June 2017.
That means all claims reported between those two dates will be used to assess your performance, and most of these claims will be used to assess your performance for three years of premiums.
The costs of the claims are assessed at a point in time. For 2018/19 that point was 31 March 2018. The costs include everything that has been paid to date plus everything WorkSafe expects to be paid in the future (using the Statistical Case Estimate, or SCE).
But, your older claims can still impact your premium.
If a recovery is made on an older claim, for example, if a common law claim was made against a third party, then that recovery amount is taken from your current claim costs.
For example, if your claim costs from the last two and a half years are $200,000, but you have a recovery from an older claim worth $50,000, then the claim costs included when assessing your current premium will be $150,000.
Claims from other businesses in your industry
Remember that one of the factors that drives your premium is the industry you operate in. This happens in two ways.
Firstly, the risk of the industry is assessed using the claim costs of the industry as a whole. In this case, WorkSafe use the last FIVE years of claims, as opposed to the last two and a half years. Theses costs are used to determine the industry rate.
Secondly, your performance is measured against your industry peers to calculate your Employer Performance Rate, or EPR.
Because of these two factors, your claim performance may be improving, but if your industry is improving faster, you may in fact end up paying a higher premium.
At the end of the day, the best way to reduce your WorkCover premium is to improve your claim performance, and encourage your industry to do the same.
Are there any claims that don't affect premiums?
Like other types of insurance, WorkCover insurance includes an excess amount. With your car insurance you might pay the first $750 of the cost of your claim for example. In Victoria, your WorkCover claim excess is the first 10 days the employee has off work, and the first $707 of medical and like expenses (GP, physiotherapist etc). Claims that have not reached that threshold are considered 'minor' claims. Minor claims aren't included in your premium calculation. If they tip over the threshold amount, they will be used in future premium calculations.