Mississippi Property & Casualty Practice Exam 2026 – Comprehensive Prep Guide

Workers' compensation coverage is primarily influenced by job classification, payroll, and the number of employees.

Job classification is essential because different types of work carry varying levels of risk. Higher-risk jobs tend to have higher premiums due to the increased likelihood of workplace injuries.

Payroll serves as a critical factor as the total payroll of a company's workforce is often used to determine the cost of coverage. Insurers calculate the premium based on the payroll in relation to the classification of jobs to ensure that the coverage is appropriately priced for the potential risk involved.

The number of employees also plays a role; as a business grows and hires more workers, the complexity and total cost of the coverage can change. More employees do not automatically mean higher risk but contribute to the overall payroll which affects premium calculations.

This comprehensive approach helps ensure adequate coverage tailored to the specific risks associated with the work being performed and the total financial exposure of the employer.