Experience rating (workers’ compensation)

In some provinces a seller’s claims history can carry over to a buyer’s premiums. The Saskatchewan board describes its Experience Rating Program as an annual process where employers may receive a discount or surcharge to their industry premium rate based on their individual claims experience. The term sits next to the workers’ compensation assessment in diligence.

How it differs by province

• Saskatchewan: the board decides whether the original firm’s experience should transfer to the successor firm. If it does, it uses the combined experience to determine the successor’s premiums. It says that in most cases it will not transfer the experience if the firms are not affiliated.
• Manitoba: the board says business changes can affect coverage, claims cost experience, classification, rate and premiums.
• Ontario: the WSIB says its premium rate-setting model has replaced its experience rating programs, NEER and CAD-7.

What to ask

This entry cites only Saskatchewan, Manitoba and Ontario. Ask the seller for the current rate statement, any surcharge or discount, and whether the board has said how a change of ownership will be treated. Open claims are a separate question, covered in what happens to existing WSIB claims when a business is sold.