Standard Premium

What Does Standard Premium Mean?

A standard premium is the insurance premium commonly applied to general liability insurance and workers’ compensation. It is calculated based on statistical data from the insured company’s payroll. Basic premiums are typically a percentage of these standard premiums.

Insuranceopedia Explains Standard Premium

Premiums can sometimes vary based on the conditions of the insured, requiring a method to calculate new premium prices. For workers’ compensation and general liability insurance, this is often done through retrospective rating. This approach helps determine a standard premium amount for coverage, which is then used to access the necessary insurance to protect the company against risks, such as those related to workers’ compensation or other perils it seeks to cover.