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What Is My Workers' Compensation Experience Mod? And How Can I Control It?

We all know as business owners that Workers’ Compensation is an essential coverage we need to carry. But, many of us may be unaware of how our premium is calculated and what factors are considered. After all, every business has its own unique combination of operating procedures and risk factors. This is where the Workers’ Compensation Experience Modification comes in.

Check out our #RiskyBusiness video for more on Workers' Compensation Experience Modification

 

In this post, we’ll look at what the Workers’ Compensation Experience Modification is and steps you can take to control it.

What Is the Workers’ Compensation Experience Modification?

The Workers’ Compensation Experience Modification is a rating factor that looks at three years of Workers’ Compensation history at a time. It’s based on how your claim history compares to other businesses of similar size and types of employees.

It may be a single number, but it can have a big impact on your premiums. Here’s what it looks like in practice. A Workers’ Comp experience mod of 1.0 represents the industry average. If your business has had greater than average risk, your mod would be greater than 1.0, thus resulting in a higher premium. Conversely, if your business been performing better than expected from a risk standpoint, your mod would be less than 1.0, saving you money on your premium.

For example, say the average premium in your industry is $100,000 and your business has done a great job controlling its Workers’ Compensation risks, resulting in a mod of .75. Your adjusted premium would then be $75,000.

What Can I Do to Control My Experience Modification?

Now that we’ve looked at what the Workers’ Compensation Experience Modification is and just how much of an impact it can have on your premium, let’s look at how you can control it. Here are 10 steps you can take in your business to get your mod under control:

10 Ways to Control Your Mod

1. Self-inspect your workspaces or have an outside source conduct an inspection. There are experts on how to provide a safer work environment and understanding what your risk factors are will help you prioritize corrective measures.

2. Develop a safety program, educate employees on expectations and their responsibilities for safety, and document both. You can also hold employees accountable by writing a policy into the program that disciplines them for breaking the rules or rewards them for following them.

3. Establish safety performance goals for those responsible for supervising others and ensure they understand this will be one measure evaluated on their performance review.

4. Communicate with employees frequently, both formally and informally, regarding the importance of safety. This goes a long way toward creating a culture of safety in the workplace.

5. Make safety a priority. One of the best ways to do this is to make senior management visible in the safety effort and show that they support improvement.

6. Assess your accident history, including near-misses, at least monthly. Pay close attention to trends in experience and prioritize corrective measures for the worst problems first.

7. Be sure to investigate accidents immediately and thoroughly. You also need to take corrective action to eliminate hazards and be aware of fraud.

8. Report all claims to your carrier right away and bring any serious, potentially serious, or suspect claims to their attention. Additionally, you should stay on top of the claim status and keep in close contact with the adjuster to resolve claims quickly.

9. Take an aggressive approach to providing light duty to all injured employees upon their release from treatment and returning to work. Supervise light duty employees to ensure they conform to the restrictions. This protects both the employee and your business.

10. In serious cases that involve lost time, show the claims adjuster you’re interested in returning the injured employee to gainful employment by staying in contact.

There’s a lot to take in and consider. But, controlling your Workers’ Compensation Experience Mod really comes down to good risk management practices. That’s why one of the best steps you can take is to talk to your insurance agent or broker. They can help you identify potential risks and determine the steps you should take first.

 

 

For more information about how you can control your Workers’ Compensation Experience Modification and to ensure you have adequate coverage, reach out to your VGM Insurance Services Account Manager or contact us today at info@vgminsurance.com or 800-362-3363.

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