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Controlling Your Experience Modification Factor

By July 29, 2014August 22nd, 2018

An experience modification factor compares your Workers’ Compensation claims experience (prior year’s losses and payroll) to other New York employers of similar size operating in the same kind of business.

If you are the industry average, your experience modification rating factor is a 1.00. If your experience is 20% better than average, your experience modification rating factor would be .80 which results in a 20% credit applied to your premium. If your experience is 20% worse than the average employer, your experience modification rating factor would be 1.20 and results in a 20% surcharge being applied to your premium.

In addition to insuring that all the data included in your calculation is correct, improving your safety practices can help control Workers’ Compensation insurance costs. Try the following:

  • Develop a formalized safety program with written procedures including personal protective equipment guidelines.
  • Conduct a job hazard analysis for key positions.
  • Create a corporate culture of safety. Top management should lead by example.
  • Start new employees with a safety discussion as part of your orientation process.
  • Reinvest in experienced employees. Develop an ongoing safety training program to keep experienced workers engaged.
  • Stay on top of trends and emerging issues by reviewing your claim history on a regular basis.
  • Commit to a formalized Recovery-At-Work program to reduce the impact from lost time claims.

For more information on how to help control your experience modification factor, email Aisha Hartford at The Flanders Group @[email protected] or call 800-462-6435.