An EMR (Experience Modification Rate) is used mainly by insurance companies as a metric to gauge past and future workers compensation claims. Insurance companies translate the experience modifier into a number or an EMR. This number is based on a company’s historical cost of injuries and future risks. The EMR is then compared to the average losses of other employers both within the state and within the same industry as your company.
The EMR can also effect a contractor’s grade within their prequalification platform. Having a high EMR can decrease your grade within your account(s).
Where To Find The EMR
Your company’s EMR can be obtained from your insurance provider, as they are required to supply this information to corporate clients at the start of each fiscal year.
Key Points
There are 3 key points you need to know about the EMR:
- Industry Average: The standard industry average is 1.0, meaning a company is performing the industry average level of safety
- Impact on Premiums: If a company’s EMR is below 1.0, their workers composition premiums will likely be lower than average. An EMR above 1.0 results in higher premiums
- Calculation Factors: The EMR is calculated based on factors such as the number of claims, the severity of injuries, and the duration over which the claims occurred
EMRs are based on data from a company’s three most recent audited policy periods. Data from prior safety incidents that occurred 5 or more years ago may still influence a company’s score.
Improving Your EMR
Companies can improve their EMR by:
- Creating written safety programs outlining clear polices and procedures, addressing potential hazards, and providing regular safety training
- Thoroughly investigating every accident or near miss to identify root causes and implement corrective actions
- Encouraging employees to report all work-related injuries and incidents
- Conducting regular risk assessments to identify potential hazards and implement preventative measures
- Regularly review your safety data, including claims history
- And, conducting periodic safety audits to assess compliance with safety procedures
Conclusion
Understanding and managing your Experience Modification Rate (EMR) is crucial for maintaining a safe workplace and controlling insurance costs. By focusing on reducing workplace hazards through effective safety programs and employee training, companies can improve their EMR, minimize accidents, and lower workers’ compensation premiums. A lower EMR not only reflects a commitment to safety but also offers significant financial benefits. Monitoring and improving your EMR should be an ongoing priority for any business, as it plays a key role in both the health of your workforce and the financial health of your company.