IC Safety from Protective Insurance Company
March 2016 An exclusive publication for Protective's independent contractors
How to improve your experience mod
Your business' experience rating is the main pricing component of your workers' compensation policy that you can directly impact. Ensuring that you have solid safety and loss prevention plans in place will help you reduce your losses, improve employee safety and lower your experience modification factor (EMF).
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What is an experience mod?
A workers' compensation experience modification (also known as a mod or ex-mod) is a number that baselines at 1.0 and tells you how your business compares to others in the industry. It's essentially a method for determining whether your business' losses are better or worse than expected. If your mod is over 1.0, your business compares unfavorably, whereas if your mod is below 1.0, your business compares favorably.
How is my experience mod calculated?
The state rating bureau or the National Council on Compensation Insurance (NCCI), an organization that administers workers' compensation on behalf of most states, evaluates your business' loss and payroll history and compares that experience with the average experience in your industry. From there, your ex-mod is calculated.
Factors to keep in mind
1. Not all businesses will qualify for an experience rating. Your eligibility is based on premium size, which varies by state.
2. The experience rating period usually consists of the prior three policy years, not including the most recent expiring policy.
3. Each loss will typically impact your mod for a three-year period.
4. The frequency of losses tends to impact your mod more than the severity of a single loss.
5. Getting injured employees back to work as soon as possible saves you mod points and money.
How can I improve my mod?
Ask yourself the following questions in order to begin improving your mod:
• Do I need to improve my hiring practices?
• Have I implemented a return-to-work program?
• Am I providing adequate safety training?
Want to know more?
To learn how to implement the proper loss prevention measures to help improve your mod, visit protectiveinsurance.com/mod.
Protective Insurance Company has many resources to help you reduce your losses and lower your mod. For additional guidance, email lossprevention@protectiveinsurance.com or call 800-644-5501 and ask for our Loss Prevention & Safety Services Department.
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