Workers' Compensation
Your premium is built from three numbers entered by hand: the class code each worker is filed under, how payroll is split across those codes, and the experience mod carried over from past claims. Koala rebuilds all three from the published rate tables, for employers paying premium in Texas.
no upfront cost · no retainer · nothing owed unless a correction is approved
The audit lands once the job is finished.
A premium audit is settled after the policy year has closed, from records rather than memory. By then nobody is on site to say which crew did what, so the split gets made from whatever the paperwork happens to say. That is where a wrong class code survives: not in an argument anyone had, but in a blank nobody could fill in.
Workers' compensation
Medical treatment and lost wages for an employee injured on the job, and the employer's liability that comes with it. In most states it is the one coverage you are required by law to carry, which is also why nobody shops it the way they shop everything else.
What the premium is built from
- Class code
- The job category each worker is filed under. It sets the rate you pay per $100 of payroll, and two codes that describe nearly the same work can carry very different rates.
- Payroll allocation
- How your wage bill is divided across those categories. A carpenter's hours filed under a roofing code are charged at the roofing rate for the whole year.
- Experience modification
- A multiplier built from your own claim history against the average for your class. Better than average and it drops below 1.0; worse and it climbs above. It multiplies everything.
- Premium audit
- The end-of-term true-up that replaces the estimated payroll you were quoted on with the actual figures. It is the point at which most of the year's errors become permanent.
Three ways this number goes wrong.
None of these is fraud, and none of them requires anybody to have behaved badly. They are what happens when a figure is entered once, under time pressure, by somebody who will never see the invoice it produces.
Error 01
A code is assigned once and never revisited
The classification on your policy was usually set the first year you bought coverage, from a description of a business that has since changed. It is then carried forward at renewal by copying last year's schedule. Nobody re-derives it, because nobody is paid to.
Error 02
Payroll lands in the wrong column
Most states allow payroll to be split across codes when the records support it, and most employers never make the split, so the whole wage bill is rated at the highest code on the policy. Overtime is another: the premium portion of overtime pay is excludable in most states, and it is routinely included in full.
Error 03
The mod is computed from figures nobody corrected
An experience mod is calculated by the rating bureau from claim data the carrier reported. Reserves set high early in a claim and never revised down, a claim that closed for far less than it was reserved at, or a claim that should have been excluded outright all inflate the mod — and the mod then multiplies three years of premium, not one.
A premium, rebuilt line by line.
Five stages, intake through filing. The fourth is a person throwing a finding away, and it is in the demo for the same reason it is in the process: a finding that will not survive a carrier pushing back is worth less than nothing.
Illustrative worksheet. Class codes and rating rules are real; the documents, the payroll figures and the resulting amounts are examples, not a result Koala is promising you.
Premium rebuild · 3-year lookback
IllustrativeWhere this file is
Return premium identified
- 5exposures rebuilt
- 3diverged
- 2kept at review
Illustrative. Across the term, after review, and net of the one candidate finding that was withdrawn.
Intake
4 documents
- dec-page-2024-25.pdfparsed
- payroll-register.xlsxparsed
- loss-runs-3yr.pdfparsed
- mod-worksheet.pdfparsed
As filed vs. rebuilt
rate per $100 payroll
| Class | Exposure | Payroll | Filed | Rebuilt | Δ premium |
|---|---|---|---|---|---|
| 8810 | Clerical office | $412,000 | 0.14 | 0.14 | $0 |
| 5403 | Carpentry | $1,240,000 | 8.92 | 8.92 | $0 |
| 5645 | Detached dwellings | $386,000 | 8.92 | 5.11 | −$14,707 |
| OT | Overtime, excess | $96,400 | full | straight | −$2,866 |
| OFF | Officer payroll | $196,000 | full | capped | −$1,570 withdrawn at expert review |
| Return premium identified across the term | $17,573 | ||||
Documents received
Four documents open the file: the declarations page, the payroll register, three years of loss runs, and the bureau's experience modification worksheet. Nothing is summarised away. Every figure below is read off the page it was printed on.
Premium rebuilt
Each exposure is recomputed from the rate pages in force on the effective date, not from last year's figure carried forward. Five lines, five independent rebuilds, before anything is compared.
Findings isolated
- 5645Residential framing rated at the 8.92 carpentry rate. Reassigned to 5645 at 5.11 on the state table for the effective date: 3,860 units × 3.81.
- OTOvertime entered the base at the full rate. Basic Manual excludes the excess third, so $32,133 leaves the rated payroll at 8.92.
- OFFOfficer payroll rated in full. The excess $17,600 over the annual maximum, at 8.92, puts $1,570 in question.
Expert review
KEPTThe 5645 reassignment and the overtime exclusion. Each rests on a published rule and a document already in the file.
CUTThe officer cap. The rebuild applied this year's maximum; the policy incepted before it moved, and under the maximum in force on the effective date the payroll is already inside it. Koala does not file a finding a carrier can close on one question.
Filed with carrier & bureau
To the carrier
Premium adjustment request: two findings, the published rule each one rests on, and the corrected worksheet.
To the rating bureau
Corrected class assignment, so the exposure that sets next year's experience mod is right as well.
What a review needs from you
Send the policy, the declarations pages and the payroll figures your carrier rated you on. Three terms gives a review the most to work with; one is enough to start.
Send nothing sensitive yet. The request form takes contact details and context only; we tell you which documents matter, and how to send them securely, once we have replied.
The other lines
- General LiabilityIn developmentGeneral liability is rated on receipts or payroll by classification and trued up at audit, and the single largest line on most contractors' audits is subcontractor cost charged at full rate. Koala is not reviewing this line yet.
- Commercial AutoIn developmentCommercial auto is rated vehicle by vehicle, and the schedule it is rated from is a list somebody last reconciled at binding. Sold trucks, departed drivers and stale garaging territories all keep billing. Koala is not reviewing this line yet.
- Umbrella / ExcessIn developmentAn umbrella is priced off the policies underneath it, so an overstated exposure on your general liability or auto is charged twice: once on the underlying line, and again in the factor applied on top of it. Koala is not reviewing this line yet.
The review is free. The answer might be no.
Tell us who you are and roughly what you spend on workers' compensation in Texas. We will say whether your file looks worth a full review, and what we would need to do one. On plenty of files the answer is that there is nothing worth filing.