Experience Modification Rate, Experience Mod, EMR, X-Mod or E-Mod? Many employers don’t have a true understanding of what an Experience Modification Rate is until they start to see their workers’ compensation premium go up. They simply understand that it makes their Workers Compensation premiums go up or down. Or, since the Experience Modification Rate can be an indication of your safety experience, owners may take notice when it either qualifies or disqualifies them to win a job.
While you can wait until your premium increases, we recommend learning more about your Experience Modification Rate. “Being aware of how it’s calculated and how you can take proactive steps to lower your Experience Modification Rate can help save your company time, money and even keep your employees safer on the job,” says Drew Gunn, Commercial Insurance and Surety Bond Agent at Thompson Insurance.
Understanding Your Experience Modification Rate
Your Experience Modification Rate, also called Experience Mod, EMR, X-Mod or E-Mod, is used to adjust your workers’ compensation premium based on your past claims and future risks. Along with your claims from the previous three years, excluding the expiring term, your E-Mod takes a number of factors into consideration, including the size and classification of your business.
In Alabama, the National Council on Compensation Insurance analyzes a collection of data in order to predict losses for the various business classifications. This data is then used to compare your workers’ compensation claims history to other similar sized employers in the same industry, which is then used to determine your Experience Modification Rate.
How Your Experience Mod Affects Workers Comp Premiums
Your Experience Mod will either result in a credit or debit to your workers’ compensation premium. While an E-Mod of 1.0 is considered to be the industry average, an E-Mod of higher than 1.0 means losses were worse than expected, and your premiums will increase for the following year. Of course, if your E-Mod is below 1.0, you’ll have a reduced premium; the lower it is, the greater the credit.
Reduce Workers’ Comp Cost with a Lower E-Mod
The first step is to ensure your E-Mod is being calculated using correct and complete information. If you find any inaccuracies or missing information, it’s crucial to let your insurance agent know in order to get it corrected as soon as possible. “We have software available to us, which will allow us to input your information and calculate your Experience Mod, to check it’s accuracy,” Gunn continues, “If we find inconsistencies or inaccuracies, we can make an appeal to the work comp carrier in a effort to get your Experience Mod recalculated and possibly revised.”
As an employer, your next step is to create a safe working environment in an effort to prevent workers’ comp claims whenever possible. Any ways you find to be proactive in preventing or reducing the risks of injuries is essential. “Insurance and Work Comp carriers love to see that businesses have a plan when it comes to managing their employee safety, and that it is actively being implemented and monitored.” Gunn continues, “We actually have a web-based suite of risk management tools and resources, The Thompson Risk Management Center, which we coach our insured’s to use. Not only does the Thompson Risk Management Center provide tools and analytics, but it provides owners with the resources they need to keep employees safer and limit safety incidents and compliance issues.” Tools and resources like these can show work comp carriers that you are serious about safety, help lower your Experience Mod and help you to instill a culture of safety in your workforce.
At the same time, it’s important to make a plan for when injuries do happen. This means management should be properly trained on how to deal with an injured employee while also being aware of how crucial it is to report the injury as soon as possible. “You need to make sure you are documenting all your work comp claims, even near misses, so you can make sure the work comp carrier knows as soon as possible and you can adapt your training to address real-life incidents your employees could be involved in,” adds Gunn.
All these actions together have the potential to greatly lower your E-Mod, and therefore, your workers’ comp cost. With a lower premium and fewer claims, understanding your Experience Mod can be a win-win for both you and your employees.
Contact Thompson Insurance in Birmingham and Montgomery, AL, for More Information Regarding Your Experience Modification Rate
Are you ready to be a customer of Thompson Insurance with locations in Birmingham and Montgomery, AL? Contact one of our Thompson Insurance Agents today to learn how our services can best fit your individual needs. Give us a call today at 334-277-8970.
Interested in Thompson Insurance?
Please provide your details and we will contact you shortly.