A
A
ACORD 130
The standard application form used to apply for workers' compensation coverage. Lists business info, payroll by class code, loss history, and other underwriting factors. Nearly all carriers in South Carolina require an ACORD 130 as the first step in the quoting process.
Assigned Risk SC
Also known as: SCWCIP (South Carolina Workers' Compensation Insurance Plan)
The South Carolina Workers' Compensation Insurance Plan — the insurer of last resort for employers who cannot get coverage in the standard market. Rates are significantly higher than the standard market, making it essential to seek private carrier quotes first before being assigned to the pool.
SC Note: The SCWCIP is administered by the Department of Insurance. Assignment occurs only after you've been declined by private carriers or when you cannot obtain a quote.
Audit (Premium Audit)
The end-of-policy review where the carrier verifies your actual payroll vs. the estimate used to set your deposit premium. Payroll records, tax documents, and payroll journals are reviewed. If actual payroll exceeds the estimate, you owe additional premium; if lower, you receive a refund.
B
B
Borrowed Servant
When an employee is "loaned" to another employer (or temporarily works under another's direction), and an injury occurs during that time. Determines which employer's workers' comp policy responds — typically the entity with the greatest right of control over the worker at the time of injury.
C
C
Certificate of Insurance (COI)
A document proving a contractor or vendor has active insurance. For workers' comp, always verify the COI clearly shows workers' compensation coverage (not just general liability) with active effective and expiration dates. Many construction projects require COIs before work begins.
Class Code (Classification Code)
A 4-digit NCCI code assigned to each employee based on their job duties, responsibilities, and workplace hazards. Determines the rate (per $100 of payroll) used to calculate premium. Proper classification is critical — misclassification is audited closely and can result in significant additional premium assessments.
Claims-Made vs. Occurrence Policy
Workers' compensation is always occurrence-based: the policy in force when the injury occurred (not when the claim is filed) is responsible for responding, regardless of when the claim notice is submitted. This differs from general liability policies, which may be written on a claims-made basis.
D
D
Dividend Plan
A policy structure where employers may receive a partial premium refund at policy end if claims experience is low. Common in group programs and mutual insurance companies. The dividend is not guaranteed and depends on the insurer's profitability and your specific loss experience.
Drug-Free Workplace Program SC
South Carolina allows a 5% premium discount for employers who implement a certified drug-free workplace program per SC Code § 42-38-10. The program must meet specific state requirements, including a written policy, education, and testing protocols. Documentation must be provided to your carrier to claim the discount.
SC Note: This is one of the few statutory discounts available in South Carolina. Contact your carrier for guidance on compliance and discount application.
E
E
Employer's Liability
Part B of a standard workers' comp policy. Covers employer lawsuits related to workplace injuries that fall outside the state WC system — for example, if an employee sues for gross negligence or intentional misconduct. Covers legal defense costs and damages up to the policy limits.
Experience Modification Factor SC
Also known as: EMR, EMF, MOD, Experience Modifier
A multiplier applied to your base premium based on your actual claims history vs. expected claims for your industry and size. Below 1.0 = credit (lower premium); above 1.0 = debit (higher premium). Recalculated annually by NCCI. A single serious claim can raise your mod significantly and increase premiums for 3+ years.
SC Note: Your EMR is one of the most impactful rating factors. Investing in safety programs and return-to-work initiatives can reduce it meaningfully over time.
Estimated Annual Premium (EAP)
The upfront premium estimate calculated at policy inception, based on projected payroll and your risk profile. This is the premium amount used to set your deposit (typically 25–40% of EAP). The true premium is determined only after the policy ends and a final audit is performed.
F
F
Final Audit Premium
The true premium calculated after the policy ends, based on actual payroll recorded during the policy period. If higher than the estimated annual premium, you owe the difference; if lower, you receive a refund. Usually calculated 90–120 days after policy expiration.
G
G
Ghost Policy
A workers' comp policy purchased by a sole proprietor or corporate officer who has excluded themselves from coverage. Provides no actual coverage to the owner but satisfies subcontractor Certificate of Insurance requirements. Very common in construction when sole proprietors need a COI for their GC clients but don't want to pay for coverage they won't use.
SC Note: Sole proprietors in South Carolina are automatically excluded from WC coverage. A "ghost" policy is often a cost-effective way to meet client COI requirements.
I
I
Indemnity Claim SC
Also known as: Lost-Time Claim
A workers' comp claim that involves wage replacement payments (lost wages) in addition to medical benefits. These claims significantly affect your experience modifier because they are more costly. Even a short-term indemnity claim (3–7 days off work) will impact your mod more than a medical-only claim.
SC Note: Indemnity claims drive your experience mod calculations. Effective return-to-work programs can minimize indemnity duration and protect your rates.
Independent Contractor (1099 Worker)
A worker classified as self-employed and issued a Form 1099 rather than a W-2. Not automatically covered under your WC policy — however, if they lack their own WC coverage and cannot prove legitimate independent contractor status under SC law, their pay may still be included in your auditable payroll, resulting in additional premium.
SC Note: South Carolina scrutinizes independent contractor classifications closely. Carriers often audit 1099 pay to ensure proper classification. Keep documentation proving legitimate contractor status.
L
L
Large Deductible Plan
A workers' comp policy structure where the employer retains (self-insures) the first portion of each claim — typically $25,000 to $250,000 per claim. In exchange, base premiums are significantly lower. Only viable for financially strong employers with stable cash flow who can absorb large claim costs.
Loss Runs
A detailed report from your insurance carrier showing your claims history over the past 5 years — including claim dates, claim types, amounts paid, amounts reserved, claim status, and outcomes. Essential for obtaining competitive quotes from other carriers. Many employers request loss runs annually to track their claims profile.
M
M
Medical-Only Claim
A workers' comp claim with only medical costs (doctor visits, treatment, procedures) and no lost wages (indemnity). These claims are typically weighted at 30% of their cost value when calculating your experience modifier, vs. full weight for indemnity claims. Encourages employees to return to work quickly.
Monopolistic State Fund
A state where only the government can sell workers' compensation insurance (e.g., Ohio, Washington). South Carolina is NOT a monopolistic state — coverage is available through private insurance carriers, making it a competitive market with options.
N
N
NCCI
Also known as: National Council on Compensation Insurance
The organization that sets class codes, rates, and statistical rules for workers' comp in most states including South Carolina. NCCI develops actuarial data, approves rate structures, and maintains the experience modification system. Rates set by NCCI must be approved by the SC Department of Insurance.
Net Cost Ratio (NCR)
A carrier's loss ratio used to gauge profitability on a specific class of business. A low NCR means the carrier is profitable on that class; a high NCR indicates losses. Carriers use NCR data to decide which classes to actively compete for and which to avoid or price defensively.
O
O
OCIP / CCIP
Also known as: Wrap-Up Program, Owner-Controlled Insurance Program, Contractor-Controlled Insurance Program
A single workers' comp policy that covers all contractors and subcontractors on a large construction project. Administered by either the project owner (OCIP) or the general contractor (CCIP). Simplifies insurance management, improves safety focus, and often reduces total insurance costs for complex multi-contractor projects.
P
P
Pay As You Go SC
Also known as: Payroll Reporting, Quarterly Reporting
A premium payment structure where WC premium is calculated and paid each payroll cycle (or quarterly) based on actual wages paid that period, rather than on an annual estimate. Eliminates large upfront deposits, improves cash flow, and significantly reduces audit risk because payment is based on real-time payroll data.
SC Note: Pay-as-you-go is ideal for growing companies or those with fluctuating payroll. Some carriers in SC offer this structure; ask about availability when quoting.
Premium Discount
A reduction applied to large policies to reflect the decreased claim-handling and acquisition costs per premium dollar. The larger your total premium, the greater the discount percentage. NCCI sets the discount schedule; most SC carriers offer 15–35% discounts on large accounts.
PEO
Also known as: Professional Employer Organization, Employment Management Company
A company that co-employs your workforce and provides workers' comp coverage under their master policy. Payroll, HR, and benefits are handled by the PEO. Can be cost-effective for high-risk employers who cannot obtain standard market coverage or who benefit from the PEO's loss control and safety programs.
R
R
Rate
The base cost per $100 of payroll for a given class code, set by NCCI and approved by the SC Department of Insurance. For example, a rate of $1.50 per $100 payroll means an employee earning $50,000 in that class generates $750 in base premium before any mods, discounts, or credits.
Return-to-Work (RTW) Program SC
A formal program that brings injured employees back to work in modified-duty roles while they recover. Reduces indemnity (wage replacement) costs and positively impacts your experience modifier. Employers with strong RTW programs typically see better insurance rates and fewer long-term claim complications.
SC Note: South Carolina workers' comp law supports RTW programs. Many carriers offer loss control credits for documented RTW initiatives. Contact your broker for best practices.
Retrospective Rating Plan (Retro)
A workers' comp program where final premium is partially determined by actual losses during the policy year. Good loss experience lowers final premium (with a minimum floor); bad losses increase it (with a maximum cap). Typically used by large employers with predictable, stable payroll.
Rule of Four SC
South Carolina's workers' comp coverage threshold: employers with 4 or more employees (full-time, part-time, seasonal) must carry WC. Part-time employees count toward the four-employee threshold. Sole proprietors and business partners are automatically excluded unless they elect coverage by endorsement.
SC Note: This is the critical trigger for WC coverage in South Carolina. Many employers miscount part-time workers. Confirm your employee count carefully.
S
S
Schedule Credit/Debit
A carrier-applied adjustment (positive or negative) to your manual premium based on subjective underwriting factors such as management quality, safety programs, financial stability, equipment condition, and facility quality. Can range from –25% to +25% in South Carolina, significantly impacting final premium.
Sole Proprietor SC
In South Carolina, sole proprietors are automatically excluded from workers' comp coverage. They may elect to include themselves by endorsement if they wish to be covered. Many sole proprietors in construction purchase "ghost" policies (excluding themselves) only to satisfy COI requirements for subcontract work.
SC Note: As a sole proprietor, you are NOT covered under your own WC policy unless you explicitly elect coverage. Discuss your coverage needs with your insurance broker.
Subrogation
The insurance carrier's legal right to recover claim costs paid on your behalf from a responsible third party. For example, if a vendor's negligence causes an employee injury, the carrier may pursue the vendor's liability insurance for reimbursement. Subrogation reduces overall claim costs and can lower future premiums.
U
U
USLH
Also known as: United States Longshore and Harbor Workers' Compensation Act
Federal workers' compensation coverage for maritime workers injured on navigable waters or adjoining areas. Separate from state WC — required for South Carolina employers with maritime exposure, such as dock workers, ship crew, and waterway-based operations. Benefits are typically higher than state WC.
SC Note: If your business involves maritime operations in SC (ports, shipping, water-based work), confirm USLH coverage is properly addressed in your insurance program. Standard WC does not cover maritime injuries.
W
W
Waiver of Subrogation
An endorsement that prevents your insurance carrier from pursuing recovery against a specific third party. Commonly required by general contractors in their subcontract agreements with subcontractors. For example, a GC may require subs to waive subrogation against the GC so the GC's carrier cannot recover losses from the GC's negligence.
Workers' Compensation Commission SC
Also known as: SCWCC
The South Carolina state agency that oversees workers' comp claims, disputes, and settlements. Handles claim disputes, mediates disagreements between employers, carriers, and employees, and administers the WC system. If a claim is denied or a dispute arises, you can request a hearing before the SCWCC.
SC Note: The SCWCC is your resource for claim disputes or if a carrier denies a legitimate claim. The Workers' Compensation Commission also maintains loss runs and experience mod records for South Carolina employers.