What is required to calculate the estimated annual premium in a standard Workers' Compensation policy?

To calculate the estimated annual premium for a standard Workers' Compensation policy, one needs the estimated annual payroll and work classification. The reason this is the correct answer is that the premium is primarily based on the risk associated with the types of work performed and the total payroll for those jobs.

Each work classification has a corresponding rate that reflects its risk level, which is multiplied by the total estimated payroll for employees in that class. This reflects the insurance company’s assessment of the likelihood and potential cost of workers' compensation claims given the nature of the work.

Estimating annual gross sales, counting employees, or calculating active work hours does not directly factor into premium calculation in the context of standard Workers’ Compensation policies. Sales figures might give insight into a company’s overall financial health but do not relate directly to the exposure to workplace injuries. Similarly, the number of employees or their hours worked may influence overall risk perception but are insufficient by themselves for premium determination without payroll data linked to specific job classifications.