Experience Modification Rate

What Is an Experience Modification Rate

Insurance companies use the experience modification rate (EMR) to calculate rates for worker’s compensation premiums. They take into account past issues and future risks.

Average EMR

The average EMR is 1.0 for most companies. This is with very little or no risk at all. This rate is determined through complex calculations using an occupation code, company history and other facts related to injuries. Essentially, the higher the risk of an injury happening, the higher the EMR turns out.

How a Company Gets a Higher EMR

Your company will get a higher than average (1.0) EMR if they have injuries or accidents. The EMR goes up with each claim made to worker’s compensation. A higher than average EMR means a higher premium for worker’s compensation insurance. A company with one large loss or big accident will pay a lower premium than one with many small accidents.

How Companies Lower Their EMR

Fortunately, a company can lower its EMR. It takes a bit, but it will lower the premium after time. They do this by implementing safety programs and other injury prevention programs. No injuries equal a lower EMR and a lower premium. They can also hire a safety consulting company to help them lower their premiums and EMR.

The EMR is a safety rating based on the number of injuries in a given period. An average EMR is attainable with time and effort on the companies part.