Did you know that most states require you to have a Worker’s Compensation Insurance Policy?
It’s extremely important to have since work accidents can happen at any time. A big factor of your worker’s comp policy comes down to your EMR. Keep reading to discover how to know what your EMR rating is and how to lower it for lower premiums.
What’s an EMR?
EMR stands for Experience Modification Rate, which is also called a Moderator or Factor. It’s used to price workers’ compensation insurance premiums. Third parties look at your history for an idea of future risk, say construction for example. Insurance companies will use an organization’s EMR to determine the past cost of injuries and what the future risks will be. The average EMR is 1.0. If your EMR goes below 1.0, then your company is considered safer than most, then this means a lower premium. On the other hand, if your EMR goes above 1.0, you’re considered riskier and that might cause your company to be unable to bid on certain projects.
Determining your EMR
Each claim is analyzed using an EMR worksheet that looks at different factors such as the type of incident and monetary value, as well as your payroll. You can compare yourself to the industry average’s 1.0 and keep in mind anything above 1.0 is high. Looking at best performers in your industry, they might have very low EMRs. If the best performers in your industry have very low EMRs, a 1.0 could then be considered high. You could also compare yourself to your own performance. Since no employers have the same experience, take a look at yourself instead of others. Maybe you had a higher EMR in the past, but how are you decreasing it now? Are using enhanced safety programs and paying more attention to safety measures? Remember your EMR changes from time to time and you can lower it.
Lowering your EMR.
First and foremost, you’ll want to learn about any procedures for best practices your company isn’t following. That way you can prevent hazards and injuries. You’ll also need to have a plan in place to manage injuries and workers’ compensation claims. Make sure to document all the changes you’ve completed and sent your insurance company a summary of it. EMR Rating. Curious to find out what exactly affects your EMR? For starters, your business age comes into play.
If you’re a new business with less than three years of claims, your EMR will normally be 1.0. It’s important to pay attention to your industry and the frequency of your claims as well. No matter how expensive they are, too many claims will affect your EMR, and some industries have more claims than others.
Determining Your EMR and then acting on lowering it is vital to keep insurance premiums down. Keep your industry in mind and plan out all safety measures you can take to lower your EMR rating. Contact us and we’ll find the best insurance carrier for your needs.