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Annual Payroll x Workers Compensation Rate per $100 = Manual Premium
Manual Premium x Experience Modification = Final Premium
All businesses start with an experience modification, EMR, of 1.0. The modification rate varies annually for each business. One company may have a low mod rate of .55 while another company in the same line of business may have a mod rate of 3.0 as a result of their actual claim activity.
An insured is eligible for an EMR experience rating when the last policy year or the last two policy years of the experience rating period produced a premium of at least $11,000. If more than two years of data is used, an average annual premium of at least $5,500 is required.
Each workers comp insurance claim will affect your experience mod for at least 3 years.
The “claim amount” for experience modification purposes includes the actual dollar amount paid to the claimant and the “reserved” dollar amount held in anticipation of future payment on that claim.
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We specialize in helping businesses take control of their worker’s compensation insurance bu reducing their experience mod. At Advantage Insurance Solutions our free Experience Mod Audit program is the answer and it starts with a FREE experience mod audit and review.