When discussing your workers’ compensation premiums, you’ll often hear about the importance of reducing your “mod.” But what is a mod? Your “mod” is your Experience Modification Rating. It is the number used by your insurance company to gauge both the past cost of injuries and the future chance of your risk of additional injuries. The lower the mod, the lower your workers’ comp premiums.
Here is a quick way of looking at it. Ask your insurance carrier what your mod is. If your experience mod is 1.00, you’re doing OK. If it is less than 1.00, that’s great and obviously desirable You’re saving money and running a safe operation. If it is greater than 1.00, you’ve got work to do, as this is costing you.
As an example, if your mod is .90, than you are 10% below your industry standard. If you are at 1.10, you are 10% above the industry standard. In the former case, your premiums will begin to drop. In the latter, you will find you are in a “penalty phase” in you rates will go up.
If you don’t know what your current experience modification rating is, contact your insurance carrier to find out. If you need help reducing it, call me.
Other Posts you might want to read:
- Workers’ Comp Fraud: The Red Flags
- Workers’ Comp Record Retention
- HR HelpLine: When You Need Expert Advice
- Workers’ Comp, FMLA, & the Critical Avoidance of Staking