What is the Lowest Workers’ Comp EMR Possible?

An experience modification rate, or EMR, will have a big influence on a company’s Workers’ Compensation insurance premiums. So, what is the lowest Workers’ Compensation EMR possible?

Having the lowest Workers’ Compensation EMR possible is a goal for many employers. For the most part, the lowest EMR you can get hovers around 0.5. This is generally considered indicative of a very good safety record. Having a low EMR will also mean your Workers’ Compensation premiums will be lower. You can estimate your company’s EMR by dividing its actual losses from Workers’ Compensation claims by its expected losses. Expected losses are based on industry information. If your EMR is high and you want to lower it, you can do so by implementing safety programs and offering transitional jobs to injured workers.

For assistance finding workplace liability insurance for your company, call NPN Brokers at (561) 990-3022 and speak with our Workers’ Compensation insurance brokers today.

What is the Lowest Workers’ Comp EMR You Can Have?

Your company’s experience modification rate, also known as its EMR or e-mod, will be based on its actual losses compared to the expected losses within its industry. The lowest Workers’ Compensation EMR typically falls beneath 1.0.

Experience modification rates are assessed based on whether they are below 1.0 or above 1.0. Depending on your company’s actual losses due to Workers’ Compensation claims within the past few years and the expected losses of Workers’ Compensation claims in its industry, your company’s EMR might fall below 1.0.

Generally, the lowest EMR you can get is about 0.5. This indicates that a company has below average Workers’ Compensation claims for its industry. Having a low EMR might also mean that a company has a good return-to-work program for injured employees, meaning that its Workers’ Compensation carrier does not have to pay substantial lost-wage benefits. It is very rare for companies to have EMRs lower than 0.5.

Having a low EMR can be challenging for certain companies prone to workplace accidents, such as those in the construction industry. That said, reducing your EMR is not impossible, even if you operate in a dangerous industry.

What Will a Low EMR Mean for Your Workers’ Comp Premiums?

If your company has a low experience modification rate, that will likely mean its Workers’ Compensation premiums will be less expensive than its counterparts.

Your EMR is what largely determines your company’s insurance premiums. A low EMR indicates that a company is better at handling Workers’ Compensation claims and preventing workplace accidents than companies within the same industry and of a similar size. A low EMR means that your company is less risky to insure, which means you will likely see less expensive Workers’ Compensation premiums.

So, the lower your company’s experience modification rate is, the more affordable its Workers’ Compensation premiums may be.

How Can You Estimate Your Workers’ Comp EMR?

Estimating your company’s EMR is important so that you have a better idea of where you stand regarding Workers’ Compensation premiums. Using industry information and referring to your company’s history of claims, our Workers’ Compensation insurance brokers can help you estimate your EMR and see if it is low or high.

Experience modification rates are typically assigned by the National Council on Compensation Insurance (NCCI). If your state does not use the NCCI for this process, its state rating bureau will calculate your company’s EMR.

E-mods are calculated by dividing a company’s actual losses by its expected losses. Expected losses are based on industry information regarding Workers’ Compensation claims. Actual losses are found by referring to your company’s Workers’ Compensation claims over the past several years.

Let’s estimate an EMR. Suppose your company’s actual losses for Workers’ Compensation claims over the past few years were $15,000. Then, suppose that its estimated losses based on industry information should be about $20,000. In that case, your EMR would be 0.75, meaning its Workers’ Compensation premiums should be lower than average.

Now, let’s flip the calculation. Suppose your company’s actual losses for Workers’ Compensation claims over the past few years were $20,000. Then, suppose that its estimated losses based on industry information should be about $15,000. In that case, your EMR would be 1.3, meaning its Workers’ Compensation premiums should be higher than average.

Whether your EMR is low or high, our brokers can help you find a policy that’s within your budget and ensures all employees are protected.

How Can You Lower Your Workers’ Comp EMR?

If your company’s experience modification rate exceeds 1.0 and you are being given expensive Workers’ Compensation quotes, all is not lost. Employers can lower their EMRs by taking certain steps.

The best way to lower your EMR is by reducing the number of Workers’ Compensation claims paid out to injured employees. So, you will have to stop workplace accidents from taking place. To do this, analyze the top causes of accidents and injuries among your employees. This can allow you to get to the root of the problem and lower the frequency of accidents in the workplace.

Running background checks and requiring mandatory training can also help to lower your company’s EMR. Transitional jobs can help on this front as well. With transitional jobs, employees can return to work sooner while adhering to work restrictions from doctors. This can lower your company’s actual losses due to Workers’ Compensation claims, as your carrier may not have to pay as much in wage-loss benefits.

Identifying Workers’ Compensation fraud can also lower your company’s experience modification rate over time. You can more easily identify Workers’ Compensation fraud by investigating workplace accidents and implementing a drug-free workplace program, enabling you to drug-test employees following an on-the-job injury.

Call Our Workers’ Comp Brokers today

Call our Workers’ Compensation insurance brokers at (561) 990-3022 to get a quote from NPN Brokers today.