By Kyle Woodruff, Insurance Advisor/Producer
Insurance rates, like the cost of most of the things we buy, are increasing. You can’t control the cost of everything you need to run your business, but there is one part of your business’ insurance program you can have a key role in controlling. Keeping your experience modification factor (e-mod) low through an effective safety program can help lower your overall cost of risk.
If your company has been in business for at least three years and exceeds a certain premium level, the National Council on Compensation Insurance (NCCI) will calculate an experience modification factor that will be applied to your company’s workers compensation policy. The e-mod looks at payroll by classification of work performed as well as looses paid out (from a frequency and severity standpoint). All workers compensation carriers must use the NCCI calculated e-mod factor when writing a policy.
A debit e-mod can be very costly, as it imposes a surcharge on your worker’s compensation premium. A credit e-mod will generate savings and serves to reward your businesses for emphasizing safety and keeping claims down.
Proven strategies can help keep your e-mod in check, including:
- Early return-to-work programs
- Incentive programs (e.g., bonuses for no accidents or loss-time incidents)
- Regular safety training
- Comprehensive risk assessments
Buy-in from your leadership team is essential for a safety program’s success. When times get challenging, your business must keep its safety commitment at the forefront.
Our team of insurance professionals at First Western Insurance are here to assist you in exploring ways to lower your e-mode while improving your company’s bottom line. Give us a call today at 1-800-994-3934 for a no-cost, no-obligation consultation.
First Western Insurance. Building relationships that provide peace of mind and protection when the unexpected happens.