If your workers’ comp premium feels stuck, your experience mod is probably why. It’s a multiplier applied to your entire premium — and unlike rates you can’t control, your mod responds directly to how you run your business.
What the mod actually is
Your experience modification rate (EMR) compares your claims history to businesses of similar size in your industry. Average performance = 1.0. Better than average pushes below 1.0 — a 0.85 mod means a 15% discount on your premium. Worse pushes above — a 1.25 mod is a 25% surcharge, on every policy, for the years it stays on your record.
What moves it
- Claim frequency matters more than severity — the formula penalizes many small claims more heavily than one large one, because frequent claims predict future risk
- Open claims count against you — reserves on unresolved claims feed the calculation, so closing claims promptly matters
- Time heals — mods typically reflect a rolling three-year window, so a bad year eventually rolls off
- Payroll accuracy matters — since the mod compares expected vs. actual losses against your payroll base
How to lower yours
- Build a documented safety program — training, hazard checks, and incident reviews reduce the claims that feed the mod
- Report injuries immediately — late-reported claims cost more and close slower
- Use return-to-work / light-duty programs — shorter disability durations mean smaller claims
- Review your mod worksheet annually for errors — misassigned claims and payroll mistakes happen and are correctable
- Work with an agent who checks it — we review mod calculations as part of quoting your coverage
Why it matters beyond premium
Many project owners and general contractors screen vendors by EMR — a mod above 1.0 can disqualify you from bids regardless of price. Keeping it low is both an insurance strategy and a sales tool.
Frequently asked questions
Who calculates my mod?
In most states it’s NCCI or a state rating bureau, using loss data your carriers report. Your agent can pull the worksheet — ask us and we’ll review yours.
Does every business have a mod?
No — smaller businesses below premium thresholds aren’t experience-rated and simply use a 1.0 factor until they grow into rating eligibility.
How fast can a mod improve?
Each policy year of clean experience replaces an older year in the window — meaningful improvement typically shows within one to three renewals of better claims performance.
Want to know what your mod is costing you — and what a better one would save? Get quotes and a mod review here.