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Excess Losses

A Workers Compensation Term Defined, Described and Explained

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Excess Losses

A term used in the experience modification factor calculation. It's the point where losses are separated into Excess Losses and Primary Losses.


Experience rating is a duel rating system utilizing both primary losses and excess losses. Both actual losses and expected losses are separated into these categories with the results being used to develop an employers Experience Modification Rate or EMR.

The excess loss portion is discounted in experience rating formulas further placing emphasis on the frequency of claims as represented by primary losses. the discounts used are significant and have historically been applied to again place more emphasis on the employer with a frequency of claims problem as opposed to one who has had perhaps only one significant claim.

Excess losses is then a rating element used in experience rating of a workers compensation policy.






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