Loss prevention & recovery product

If you’re an experience-rated employer, you have more control and choice over the way your insurance premiums are calculated.

Large employers have the option to choose between an experience-rated premium model, or a loss prevention and recovery (LP&R) model. LP&R uses an alternative method of calculating premiums and provides incentives to improve workplace safety. Employers can access more immediate financial rewards for active loss prevention and recovery at work solutions compared to the standard model of premium calculation.

Who is eligible

Large employers are eligible for the LP&R product.

You are considered a large employer if:

  • your average performance premium exceeds $500,000 for a 12 month period of insurance (this can be pro-rated for shorter periods of insurance), or
  • you are member of a group of which at least one member’s average performance premium exceeds $500,000.

The model is best suited to large employers because they have the capacity and resources to manage and improve systems for loss prevention and recovery at work.

'Burning costs' model

LP&R premiums are calculated using a burning cost method.

Rather than wages, premiums are calculated based on each employer’s claims costs each year. Burning cost arrangements are commonly used in commercial insurance environments.

This model provides stronger incentives to improve workplace safety and outcomes for injured workers.

We offer you more immediate financial rewards for active loss prevention and recovery at work compared to the standard model of premium calculation.

Your premiums will more closely reflect your individual experience and success in loss prevention and recovery at work.

Calculating premiums

Premiums are calculated based on each employer’s individual claim costs each year, banded by a minimum premium and a maximum premium.

Download cost of claims definition 2021-22 LP&R policies (PDF 0.5MB)

Maximum premium payable

From 2021/22 the maximum premium is capped as per the following table, based on the employer's APP, plus the standard levies. The minimum premium is the same as the scheme minimum of $175.

For grouped employers, from 2021/22 the maximum premium for the group is based on the Group APP, which is apportioned out to all members of the group.

APP Band (Individual or Grouped policy) Maximum Premium
>$500,000 - $1,000,000  4.129 x APP
 >$1,000,000 - $2,000,000  5.008 x APP
 >$2,000,000  5.985 x APP

Claim limits

An employer must elect a large claim limit of $350,000 or $500,000 (per individual claim) to apply to injuries received by workers or deemed to have been received by workers during the period of insurance.

Additional costs

At the commencement of any period of insurance, employers may choose to pay a security deposit or pay the alternative Renewal Premium adjustment (RPA) for the term of the insurance period.

Option 1: Security is represented by cash, bank guarantee or insurance bond which is to ensure payment of premium if employers are not able to meet their workers compensation liabilities.

Option 2: The RPA is an alternative option paid as part of the premium in place of the security deposit.

How to take out a policy

There’s now a single application form that combines three elements:

  1. Your application
  2. Declaration of estimated wages.
  3. A self-assessment of your Work Health and Safety (WHS) and Return To Work (RTW) programs. This same form is used for each renewal.