What Does Standard Premium Mean?
A standard premium is an insurance premium typically used for general liability insurance and workers' compensation. These premiums are calculated using statistics from an insured company's payroll. Basic premiums are a percentage of standard premiums.
Insuranceopedia Explains Standard Premium
Premiums can sometimes vary depending on conditions of the insured. When this happens, there needs to be a way to calculate the new premium prices. Thus, for workers' compensation, and general liability insurance, this figure is often calculated through retrospective rating. This helps the company get a standard premium amount for coverage. This premium is used to access the insurance that the company needs to hedge its risks for workers’ compensation, or whatever other peril it is seeking protection against.