Glossary · PA Workers' Comp

Loss Cost

The PCRB's actuarial estimate of expected workers' comp claim costs per $100 of payroll for a given class code, before insurer markup.

Definition

A loss cost is the pure-loss component of a workers' compensation rate — the actuarial estimate of what it costs to pay claims for a given class code per $100 of annual payroll. In Pennsylvania, loss costs are filed by the PCRB and apply uniformly to all insurers in the state.

How Loss Costs Are Set and Why They Vary by Class Code

Loss costs represent only the expected claims payments portion of the premium. They do not include the insurer's expenses, profit, or taxes — those are captured in the Loss Cost Multiplier (LCM) that each carrier files separately.

Loss costs vary enormously by class code. A clerical worker (Code 953) might have a loss cost under $0.10 per $100 payroll. A roofer (Code 551) might have a loss cost of $10+ per $100 payroll. This 100x difference reflects the dramatically different injury rates and severity between office work and roofing.

The PCRB updates loss costs periodically — typically annually — based on Pennsylvania's actual claims experience. The 2026 PCRB loss costs became effective April 1, 2026 and reflect several years of statewide claims data.