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Why Experience Modifier Ratings Matter
The Experience Modifier Rating, or EMR, is based on the level of a company’s “experience” with worker injuries. The more frequent or severe the company experiences injuries, or even deaths, the higher their EMR. Conversely, the less often a company experiences injuries or fatalities of workers, the lower their EMR. EMRs can be as low as 0.40 to as high as 1.0, with a 0.40 representing the best safety record possible.
The notion of an EMR serving as a “score” of the effectiveness of a company’s safety program is because the EMR can be a quantifiable indicator of how effective a company’s safety program can be presumed to be at mitigating worker injuries. The lower the EMR, the more effective the safety program.
Insurance carriers use EMRs to determine the cost of providing Workers’ Compensation insurance to individual companies. Each company’s EMR is compared to the average losses of other employers in their state and in the same industry. Companies with the lowest EMR are essentially paying less for Workers’ Compensation insurance than companies with higher EMRs. And insurance costs matter because they factor directly into a company’s overhead which, in the end, must make its way into customer quotes and invoices.
It is always important to measure your company’s performance history—those metrics can include how your company performs on its projects, the quality of your employee’s work, company profitability, and most importantly for Standard, the effectiveness of our safety program.
So, ask companies you are inviting to bid on a project for their EMR as part of their bid response. And remember, the lower the EMR they provide, the more effective their safety program and the lower their Workers’ Compensation insurance rates will likely be. And the less they are paying in insurance and the fewer on-the-job injuries they sustain, the more competitive their quotes for projects will likely be.