Workers' Compensation
What Is Self-Insurance?
Workers’ Compensation Group Self-Insurance is a unique alternative to traditional insurance. Members in a self-insured group pool their premiums with like-minded businesses to share the risk and reduce overall exposure. In doing so, expenses are minimized, losses are shared, safety programs become a top priority, and locally managed and administered claims handling gives employers greater control, resulting in substantial savings.
Like traditional insurance, premiums for self-insurance are based on payroll and experience. Those dollars are then invested until needed to pay claims and other costs, after which the surplus may become available for return based on shared and individual member loss experience. Unlike regular premiums paid for traditional insurance, the contributions made to the Group yield a return for its member investors.
You pay for the coverage your business actually needs. You manage it through a program governed by people like you. And when the group performs well, you benefit from it directly. That is the alternative to writing a check to a commercial carrier every year and hoping for the best.
Shared Risk, Shared Success — Coverage That Pays
History of Group Self-Insurance Associations in Virginia
Highly regulated by the Bureau of Insurance through routine audits and annual reporting, Group Self-Insurance was created to provide a strong and stable option for workers’ compensation coverage.
In 1978, the Virginia General Assembly formed a legislative committee to study the problem of high workers’ compensation premiums for employers and to determine what other states may be doing to combat this problem. The result was legislation enacted in 1979 by the Virginia General Assembly to allow the formation of Workers’ Compensation Self-Insurance Funds, which are referred to as Group Self-Insurance Associations (GSIAs).
Regulatory and Informational Resources
The following sources provide information on workers’ compensation insurance.
- Virginia Workers’ Compensation Commission
- Workers’ Compensation Notice Form — Virginia Workers’ Compensation Commission
- Virginia SCC — Bureau of Insurance
- National Council on Compensation Insurance (NCCI)
- Independent Insurance Agents of Virginia, Inc.
- International Risk Management Institute
- AM Best
- Business Insurance
- Risk & Insurance Management Society
- WorkersCompensation.com
- Professional Insurance Agents Association of Virginia & D.C.
Also known as the “experience mod,” an experience modifier is a numerical expression of a company’s accident and injury record compared with the industry average. A rating of 1.0 means a company has an average safety record, while a mod of 0.80 means a company has a good safety record that could earn a 20% discount. A mod of 1.20 means a company’s accident rate is higher than the industry norm and raises costs by 20%.
Experience Mod | What It Means | Premium Impact |
|---|---|---|
0.80 | Good safety record — better than industry average | 20% discount on premium |
1.00 | Average safety record — at industry norm | No adjustment |
1.20 | Accident rate higher than industry norm | 20% surcharge on premium |
Your experience mod uses three years of data, excluding the most recently completed year. For example, a 2026 Experience Mod would take into account years 2022, 2023, and 2024. There are many variables that go into the calculation, including medical vs. indemnity claims, frequency, severity, payroll, and occupational class.
The formula used is calculated by the National Council on Compensation Insurance (NCCI), or, in the case of Virginia Commerce, it is promulgated by a third-party using the NCCI formula.
For a detailed explanation, NCCI has published a very helpful document: “The ABC’s of Experience Rating”.
Protecting Your Employees and Your Profit — Stronger Coverage, Together
Who Is Eligible to Join Virginia Commerce?
In general, potential Group members must, at a minimum, meet these requirements:
- Professional and service trades (automotive, hospitality, and retail) domiciled in Virginia
- Minimum manual premium of $1,500
- Positive net worth
- In business for 3+ years
We serve Virginia businesses that are committed to the long term — financially sound, operationally stable, and ready to engage with a program that rewards safety and performance. Not sure if you qualify? Reach out, and we will walk you through it. The conversation is always straightforward.
Built to Protect Businesses Built to Last
Why Do I Need an Audit?
Audits determine if the payroll and class codes quoted at the beginning of a plan year correctly reflect the actual payroll and scope of work conducted during the plan year. A workers’ comp audit examines the books to determine the accuracy of the estimated policy premium. A year-end audit is a verification of the exposure of a member to determine the final premium to be charged, since the original is based on estimated payroll only. Depending on the outcome, you may receive a refund or owe additional premiums.
To assist with keeping your payroll as accurate as possible, you may contact us to adjust your payroll throughout the year, and the change will be reflected in your next regularly scheduled invoice.
To expedite your audit and ensure a smooth process, please be sure the audit contact is someone who is familiar with the roles and responsibilities of each employee and can produce the following documents:
- Payroll records
- Employee records
- Certificates of Insurance
- Detailed description of the nature of your business operations
