Hazard Groups

Hazard Groups differentiate the degree of hazard for classifications from the least hazardous (group A) to the most hazardous (group G).

A hazard group is a collection of workers compensation classifications that have relatively similar expected excess loss factors over a broad range of limits.

Hazard group assignments are used to establish the proper Excess Loss Factor (ELF) for risks electing a loss limitation under a retrospective rating plan.  They also may be used to determine the appropriate premium reduction percentage for risks electing deductible insurance‚Äč.

Class codes are assigned to hazard groups based on their ELFs. This effectively categorizes the relative extent to which workers are exposed to serious injuries. The factors are developed on a state-by-state basis and are representative of the varying degrees of severity of exposure to occupational hazards inherent to operations within those classifications.Classes are placed into hazard groups based on their excess ratios (which indicate their potential of having losses in excess of a given threshold) at different loss limits. Classes in Hazard Group A have the lowest potential for large claims, while those in Hazard Group G have the highest potential.

The Hazard Groups differentiate the degree of hazard for classifications from the least hazardous to the most hazardous. The seven new hazard groups are labeled A, B, C, D, E, F, and G, with A being the lowest hazard group with the least likelihood of serious claims, and G being the hazard group with the highest likelihood of serious claims. 

Hazard Groups are different from Industry Groups which are used in the annual advisory rate filing.

The hazard groups are located in Basic Manual, Appendix E.