How Experience Modification Rates Can Impact Your Company’s Premiums for Workers’ Compensation

Modification Rates

Although it’s perhaps not heard as commonly as some other insurance-related terminology, the experience modification rate, or ex mod, is critical in determining how many injuries occur in your workplace and, consequently, what your premiums may end up being. Even with ex mod insurance coverage, it’s in your company’s best interest to understand what affects this rating, and the impact it can have on your business and bottom line.

Understand Which Factors Go Into Determining Ex Mod

In order to find solutions to lowering premiums and improving safety, you should first review the factors that determine rates. The calculations are often complex, but tend to include:

  • Your company’s losses versus typical industry losses
  • The size of your business and number of employees
  • How severe the injuries are

It’s Possible To Improve Premiums by Focusing on Lowering Incidents

The more injury claims you have, the more your premiums will be impacted by your ex mod rates. The bright side of this is that it’s possible to improve your premiums simply by focusing on lowering incidents of injury. For example, if you implement more safety training and work to bring current claims to resolution, you could benefit both your employees and your budget.

As an incentive to employers to keep their workplaces as secure and safe for workers as possible, experience modification rates are generally tied to premiums. With this extra information and ex mod insurance coverage, you can help ensure lower injury rates, better premiums and a safer workplace.

Frank