What Is a Good EMR Rating? Understanding Your EMR Score

Oct 2, 2019 | Business Insurance

EMR Rating, EMR Score and Workers Compensation Insurance

Did you know that most states require you to have a workers’ compensation insurance policy? It’s extremely important to have since work accidents can happen at any time. Are you wondering what your EMR rating or EMOD rating is and why it’s so important? 

In this article, you’ll learn what a safety EMR rating is, why it’s important, and how to lower it. Read on to discover how to know what your EMR safety rating is and how to lower it for lower premiums

Want to just find ways to lower your Xmod rating?

What Is an EMR Rating?

There may be people who do wonder what is a emr rating? EMR stands for an experience modification rating which is also an emr safety rating, Mod-rating, Mod-factor or even e-mod. In California, they use the term XMod to refer to it. It is for pricing workers’ compensation insurance premiums. Third parties look at your history for an idea of future risk.

In California, they use the term XMod to refer to it. It is for pricing workers’ compensation insurance premiums. Third parties look at your history for an idea of future risk.

In 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 safer than most. This then means lower EMR premiums.

If your EMR score goes above 1.0, your business is riskier, and that might cause your company to be unable to bid on certain projects.

A higher EMR means a higher insurance premium as well. If your EMR is above 1.0 it is a debit factor. If it is less, then it is a credit factor. A good example is if an employer has had no claims and their credit factor is 0.85. Their unmodified premium is $100,000. 

So their modified premium would then be $100,000 X .085= $85,000. Say their credit factor is 1.25, then it would be $125,000, which would mean their modified premium is higher.

Find out how you can lower your Workers Comp EMR today.

Determining Your EMR

Your EMR is calculated by your actual insurance and workers’ insurance compensation claims. These have been reported to the NCCI (National Council on Compensation Insurance) over 5 years, but they only use the past 3 years.

Each claim analyzed is using an EMR worksheet that looks at different factors such as the type of incident and monetary value. Another factor that could affect your EMR is the size of your payroll. 

You can compare yourself to the industry average which is 1.0, and keep in mind anything above 1.0 is high. Looking at the best performers in your industry, they might have very low EMR’s, so a 1.0 could then be high.

You can 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 you using enhanced safety programs and paying more attention to safety measures? 

How Do I Lower EMR?

Lowering your EMR Rating is always something good because it means your workers are safe and you’re doing a great job at keeping them safe. 

You’ll want to work with a trusted workers’ compensation insurance company. After this, you’ll want to learn about any procedures for best practices your company isn’t following. Be open to learning these. 

Next, you’ll want to eliminate any hazards and prevent injuries. If you have no injuries there are no claims. Injuries can always happen, but you want to have a good response to them to avoid your EMR from increasing. 

Have a plan in place to manage injuries and workers’ compensation claims. Once you decide on a plan, implement it and make sure your team is on board as well. Make sure to document all the changes you’ve completed and send your insurance company a summary of it. 

Regularly meet with workers and discuss job safety. Have huddled at the job site in the morning and discuss safety practices. Develop a return to work program for those who are disabled, injured, or sick.

Once they’re cleared to return to work from their physicians, make sure you have a return to work program in place. They can include a change to their original job duties until they can return to their original job.

Having these programs helps companies save money by reducing disability claim costs and cutting training time for hiring new employees.

If your construction bids are getting rejected due to your EMR score, we can help!
Our Total Risk Advisors have helped thousands of companies
reduce their workers comp EMR premiums in the last 12 months.

Look Into Your Workers Comp Safety EMR Rating 

You’ll want to take a closer look at your EMR since it can easily change your insurance premiums and how they determine your EMR. Some of the important factors are:

  • Your business age. If you’re a new business with less than 3 years of claims, your EMR will normally be 1.0.
  • Frequency of claims. No matter how extensive they are, too many claims will affect your EMR.
  • Total premium. An EMR could be applied based on the total premiums you pay. 
  • Your industry. Some industries have more claims due to the nature of the company than others. If you work with chemicals or dangerous tools, you’re not penalized as hard for a few small claims as low-risk industries. 

Next Steps

Understanding the EMR rating meaning, 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.

Learn more about keeping your company’s safety emr rating, in this article:
Learn How To Lower Your EMR Rating.

Lower Your EMR. Talk to our Total Risk Advisor!

Do you want to know how to get a lower Workers Compensation EMR Rating?

Call or text us toll-free at (877) 658-2472 now and a Total Risk Advisor will tell you how!

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