We discussed how to calculate your Experience Mod in an earlier post, now we will discuss how to reduce your premium by focusing on your Experience Mod:
What is an Experience Modification Rate (EMR)?
The experience modification rate (EMR) is a number that represents a company's history of workers' compensation claims and their safety record. This rate is calculated by the National Council on Compensation Insurance (NCCI) based on the company's workers' compensation claims experience over a three-year period.
How Does EMR Affect Workers' Compensation Premiums?
Insurance carriers use a company's EMR to determine their workers' compensation premium. A high EMR indicates that the company has a history of workers' compensation claims, which increases the risk of future claims and raises the cost of insurance premiums. A low EMR indicates that the company has a good safety record and a lower risk of future claims, which can result in lower insurance costs.
How Can Companies Reduce Their EMR?
There are several steps that companies can take to reduce their EMR and lower their workers' compensation premiums. These include:
Implementing Safety Programs: Implementing safety programs and training employees on safe work practices can help prevent workplace injuries and reduce the number of workers' compensation claims.
Developing a Return-to-Work Program: Developing a return-to-work program can help injured employees return to work as quickly and safely as possible, reducing the duration and cost of workers' compensation claims.
Reporting Claims Promptly: Reporting workers' compensation claims promptly can help ensure that they are handled promptly and effectively, minimizing the potential impact on the company's EMR.
Working with a Knowledgeable Insurance Broker: Working with a knowledgeable insurance broker can help companies identify opportunities to reduce their EMR and lower their workers' compensation premiums.
In conclusion, a company's experience modification rate (EMR) is an important factor that affects their workers' compensation premium. A high EMR indicates a history of workers' compensation claims and a higher risk of future claims, resulting in higher insurance costs. A low EMR indicates a good safety record and a lower risk of future claims, resulting in lower insurance costs. By implementing safety programs, developing a return-to-work program, reporting claims promptly, and working with a knowledgeable insurance broker, companies can reduce their EMR and lower their workers' compensation premiums.