View this article online: https://www.insurancejournal.com/news/east/2022/01/27/651172.htm
Vermont businesses will see a rate decrease of 4.9% in workers’ compensation costs. The reduction will be effective on April 1, 2022, and is estimated to save Vermont employers more than $8 million in premiums over the next year.
Gov. Phil Scott and Department of Financial Regulation Commissioner Michael Pieciak announced the news.
Vermont employers purchase workers’ compensation through either the voluntary market or the assigned risk market. In the voluntary market — the open competitive market — loss costs (the cost of claims before insurers add profit and overhead) will decrease by an average of 4.9%. Approximately 90% of Vermont employers receive voluntary market coverage.
In the assigned risk market — the market for employers unable to obtain coverage in the voluntary market — rates will decrease by an average of 5.6%. New businesses are often required to obtain coverage through this market due to their lack of a claims history.
Rate changes vary by industry and classification. However, Pieciak said several key Vermont industries with historically high rates had significant decreases in 2020 and 2021, and most of these employers will see additional reductions in 2022. Vermont’s mechanized logging classes will see rate reductions of up to 16%, some sectors of the skiing industry will see rate reductions of 4-9%, and the dairy farming industry will see rate relief between about 7-9%.
This will be the sixth straight year that Vermont workers’ compensation costs have fallen. When this year’s reduction is combined with decreases from 2017-2021, Vermont employers will pay an average of 41% less in premiums than they did in 2016. Here is a history of recent rate activity in Vermont for the voluntary and assigned risk markets:
Source: Vermont Department of Financial Regulation