EMR Workers’ Compensation Rating: A Comprehensive Guide

How does the Experience Modification Rate (EMR) affect Workers’ Comp costs?

The EMR (Experience Modification Rate), also known as ExMod, is an important metric used to compare your risk level with the average. An EMR of 1.0 is considered the industry average.

If your company's claims history is better than average, then its EMR will be less than 1.0. If your company has had more or more severe accidents than average, your EMR will be greater than 1.0. 

Insurance providers use this rate when calculating your premium costs. An EMR below 1.0 acts as a credit (discount) to your business, reducing your insurance premiums. On the other hand, an EMR above 1.0 results in a debit (surcharge), raising your premiums. 

This system rewards companies with a safer claims history through lower costs and encourages businesses with higher risk levels to improve their safety standards.

Note:
‍If your business is new or has a small workers' comp premium, you don’t need to be concerned about the EMR just yet. The EMR starts affecting your premiums after three years of workers' comp claims history and only if your premiums are consistently above a certain minimum.  

Use this period to establish a strong safety record. If you have only a few claims now, it can mean lowered premiums once you qualify for an EMR. 

How can I lower my EMR Workers' Compensation rating? 

Here are some steps you can take to lower your EMR rating for your workers' compensation policy:

Implement Safety Programs: 

Develop and enforce comprehensive safety protocols to prevent workplace accidents. Regular safety training, equipment checks, and emergency drills can reduce the likelihood of injuries.

Engage in Loss Prevention: 

Analyze past incidents to identify patterns and implement corrective measures. This can involve upgrading equipment, improving work conditions, or modifying operational procedures.

Create a Return-to-Work Program: 

Establish a program that facilitates the transition of injured employees back to work, whether through modified duties or gradual hours. This can help reduce the financial impact of claims.

Enhance Hiring Processes: 

Up level your hiring practices to include background checks and, if applicable, physical exams. This helps ensure that new hires are well-suited for their roles and aware of safety expectations.

Maintain Accurate Records: 

Keep detailed and accurate records of safety incidents and claims. This can aid in the swift resolution of claims and provide data to help with future safety planning.

Foster a Safety Culture: 

Encourage employee involvement in safety initiatives and create open lines of communication for reporting hazards. A workplace culture that prioritizes safety can contribute to fewer accidents and claims.

By focusing on these areas, you can build a safer workplace, which can lead to fewer claims and a lower EMR, potentially resulting in reduced workers' compensation insurance premiums.

Kickstand Case: 

‍An event rental company came to us for help with reducing their insurance premiums. After reviewing their policy, we found their EMR rating to be 1.56, much higher than the industry norm. This high EMR had driven up their insurance costs by 56%. With their base premium at $10,000, they faced an extra $5,600 in charges, raising their total to $15,600. Yikes!

We told them that by minimizing claims and maintaining a clean record for three years, they could potentially lower their EMR to about 0.70. This adjustment could decrease their workers' comp expenses to $7,000 (from $15,600!) all thanks to a reduced EMR.

EMR Frequently Asked Questions

In this section, you'll find answers to common questions regarding Experience Modification Rate (EMR) and how it impacts workers' compensation.

How do I find my EMR rating?

To determine your EMR rating, look at the Declarations page of your workers' compensation insurance policy. If it's not there, your insurance agent can provide you with the details.

What is considered a good EMR rating?

A good EMR rating is typically lower than 1.0. This indicates your company has a claims history that is better than the average within your industry. The lower the EMR, the better your safety record is perceived by insurers and peers.

In terms of construction, what EMR rating reflects industry excellence?

In the construction industry, an EMR rating below 1.0 signifies better-than-average safety performance, whereas an EMR of around 0.70 is often considered indicative of industry excellence. 

Will my EMR follow me if I switch to a new insurance carrier?

When a claim is filed, your ExMod changes, causing your premium to increase the next time around—regardless of whether you stick with your current insurance carrier or switch to a new one. Your EMR also affects other businesses that you may own. 

Take control of your EMR rating today!

Are you ready to improve your EMR rating and enhance your company's safety culture? Get an instant quote now to start the conversation or contact us at (866) 338-8823. Our expert team can assist you in effectively managing your workers' compensation process and lowering your EMR. Don't let a high EMR rating stand in the way of your business's success and profitability.