Review your loss history, identify exposures, and develop strategies to lower your injury rate.
Your injury and illness rate dictate your Experience Modification or “ex mod” rate which is used by your insurance carrier to determine the correct insurance premium rate for your worker’s compensation insurance coverage. Obviously, the higher your claim rate, so follows your premiums. However, even if workplace injury and illness rates drop, your premium may not follow as quickly. Experience rating was created by state regulators to encourage workplace safety. The basis is purely fiscal leverage. The “experience rating” period is generally three policy years. Think of it as a trailing indicator that stakes past performance against your current insurance rate. Your ex mod is determined by comparing the actual losses your business has during the experience rating period to the average expected losses for all members of your same industry classification (Actual Losses/Expected Losses = Experience Modification). If your loss record is better than the average, then you will have an ex mod below 100%, or a credit. By improving workplace safety, you can help lower the chance of injury or illness in your workplace. Over time, this reduction in claims can lead to a lower ex mod. By improving workplace safety, you can help lower the chance of injury or illness in your workplace. Over time, this reduction in claims can lead to a lower “ex mod”. While many insurance companies partner with you, the insured, to help you reduce injury and illnesses, a third party analysis of your workplace is an especially good idea and more than that, doing so before injuries become and issue is the best method. We recommend periodic self-assessments and third-party workplace safety and audits of your OHS (occupational health and safety) management system performance. Doing so can improve the likelihood of better insurance rates. Please ask us how we may help. And that leads us to the next topic: Occupational Health and Safety Management Systems.