| Workers' Compensation Risk Classification |  | |
Answers to common questions about risk classification
Below are answers to common questions about the workers' compensation classification system in Washington State. These answers don't replace the official rules governing workers' comp in Washington.
What is the workers' compensation classification system?
The workers' compensation classification system is a tool which L&I uses to collect loss information for each industry we insure. This loss information is used to establish premium rates that employers in each industry will pay for their workers' compensation insurance.
L&I's goal is to produce fair insurance rates which reflect the hazardous nature of each industry. Employers engaged in more hazardous industries such as logging will tend to pay higher insurance rates than employers engaged in retail store operations.
- How is our classification system designed?
L&I uses a system of classifications which are keyed to the businesses or industries of the employers we insure. Our system has over 300 classifications which price workers' compensation insurance at a reasonable charge so businesses pay premiums based on the degree of hazard their workers are exposed to.
As required by RCW 51.16.035 (www.leg.wa.gov), our classification and rating system is based on recognized principles of workers' compensation insurance used by private insurance companies.
- How do we decide what classifications to assign to your business?
L&I needs enough information about your business operations to give us a clear understanding so we can determine the precise nature of your business.
L&I will assign a single classification or several classifications, as applicable, that best describe your overall business operations. To determine which classification(s) apply to your business, we will consider the wording of the basic classification as well as our list of general inclusions and the exception classifications.
See The ABCs of Classifications in Washington (F213‑022‑000) for aids in understanding Washington State's workers' compensation classification system and how classifications are applied to different types of businesses.
