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Taking Control of Your Experience Modification Factor – Introduction

By April 16, 2012August 22nd, 2018

Your “experience modification factor” compares your Workers’ Compensation claims experience to other employers of similar size operating in the same type of business – such as Waste Haulers, Landscaping contractors, Commercial Real Estate Managers or a Marina operation. Understanding your experience modification factor (“Experience Mod” or “Ex Mod”) and monitoring it regularly is important to reducing your Workers’ Compensation and is also an excellent measure of how well your safety, injury prevention and loss control practices stack up to your peers.

While the formula is complex, it simply compares your specific payrolls and losses to your industry’s average losses for similar operations. If you are at the industry average, your Experience Mod is a 1.0. If your experience is 20% better than average your Experience Mod would be a .80, or if your losses are 20% worse – the Exp Mod would be a 1.20. Your standard Workers Compensation premium is multiplied by the Experience Mod factor and the result is your final premium (subject to audits).

Your claims are included in this calculation for 3 years so the cost of a Workers’ Compensation claim today will be with you for years to come. In this blog series, we will look at the most effective ways to take control of your experience mod based on our expertise helping thousands of employers across New York and the U.S.