Workers Compensation Experience Modification - The Basics

Simply put, your workers' compensation experience modification is the ratio of your actual work comp losses to the losses expected of an employer like you. The calculation considers your employment classification and your payroll in the comparison.

A mod of less than 1.00 means your losses are smaller and less frequent than average. A mod of 1.00 and above means that you are average or above average.

The lower the mod the lower your premium. Work comp policy premium is determined by multiplying your payroll by the rate per $100 your insurance company charges. The resulting number is multiplied by your experience mod.

If your mod is .85 you are saving 15% on your premium. Conversely, if your mod is 1.15 you’re paying an extra 15%.

OKAY, everyone understand that? It is very simple. It is the way that it is done.

Do you remember all of the workers’ comp claims that you had last year? How about two years ago? How about three years ago? Your insurance company does. That is where these “mod” numbers come from. You make them up, yup, you do. No one has any say about this except you.

“Why does this workers comp insurance cost so much money?” the answer is because you have proven that, based upon the way you have operated, you will operate that same way in the future. It is self-inflicted inflation.

More to follow

Is there any way to lower your number? and does this also apply to your liability numbers.

I like “old Sayings.” Here is one for you.

Every cloud has a silver lining.  

This ‘reevaluation’ of the worth of your equipment has, or will have, an effect on your insurance. Fact of the matter is that since your pumps are worth less $$$, your replacement valuation and the insurance for that should go down. Whoopee right? Right!

Here is another:  “No man is an island.” Well, no insurance policy is either. If your troops are spending time wounded and on the rolls of the injured reserve you have to figure that your liability carrier is wondering how you are treating your co-workers and the general public. Just in case you are wondering what is going to happen to your rates when it is time to re-up your policy… stop wondering.

It is now officially time to get off your chair and find out what your people are DOING in the field. You have no doubt put together some type of ‘paper’ safety program; it sure looks safe, on paper. How does it do where the concrete leaves the tip hose? Do you ass-u-me that your safety policy is being taken seriously, or do you know?

Do you "owe " your insurance carrier anything other than premiums?