Workers’ Compensation Experience Modification

If your workers’ compensation premium is over $5,000, your losses impact your future premiums through the use of an experience modification. More losses, higher modification. Higher modification, higher premium.

The experience modification is a ratio of expected losses to actual losses. If your “mod” is over 1.00, your losses are above average (Bad).  A mod of .85 means your losses are below average (good).

The goal is not a 1.00 mod. At that factor you are average – think of it as a grade of C.

A perfect mod is the factor you would have with no losses. It usually comes in at about .7 for most employers. With that in mind, you have a ways to go even at a .90 mod.

Here is the #1 action to impact your experience mod:
Look at your workers’ compensation claim reporting process. Make sure employees know who to report injuries to and make sure claims are reported to the insurer fast. Then have someone in your company stay on top of the claim – review status, talk with adjuster, talk with employee.
Make someone at the firm responsible for tracking workers’ compensation claims.
Have one person who has as a part of their job employee injury prevention. Make it a part of their annual review. When a workers’ compensation claim happens someone needs to figure out what happened and why. Someone needs to figure out how to prevent the same workers’ compensation incident from ever happening again.