Does it feel like your worker's compensation premiums do nothing but go up? You’re sick and tired of paying more money but there isn’t anything you can do. Or is there?
Lowering your Experience Mod can lower your workers’ comp costs.
What is an Experience Mod?
In order to lower your Experience Mod, or “Ex Mod” as it’s often called, you need to understand how it relates to your worker's comp coverage. Your premiums are calculated using 3 factors: the rate of each payroll classification, the total amount of payroll for each classification, and your Experience Mod.
The rate for the different calculations is set by the National Council on Compensation Insurance, so there’s no changing that. Your payroll amount is set by your staffing level - cutting staff or slashing payroll isn’t an effective way to grow your business. That leaves your ex mod.
Your experience mod represents the total cost of your claims history for the past three years. Your company is assigned an ex mod based on how you compare with other companies in your state with the same job classification codes. If you have higher than average workers’ comp claims, you’ll have a higher ex mod and higher premiums.
How to Lower Your Ex Mod
Because it’s the only factor in determining your workers’ comp costs that you have control over, lowering your experience mod is a good goal to have. Here are a few ways to get that number lower and save money.
Implement a return-to-work program. When an employee is out of work with a workers’ comp claim, they’re still getting paid, but you’re not getting any productivity out of them. Every dollar they receive as part of the claim adds up. Bringing employees back to work, even on light or modified duty, lowers the total cost of a claim, and you’ll get some productive work from them in the process.
Follow a good safety program. Teaching your employees how to stay safe and properly use equipment will prevent accidents. Following a specific protocol for all accidents will make sure things are reported timely and further injuries are prevented. When everyone is aware of the importance of safety on the job, claims go down.
Don’t use uninsured subcontractors. When your subcontractors don’t have their own workers’ comp coverage, they’ll be covered under yours. This is bad if there’s an accident. You’ll be paying higher workers’ comp costs for people who aren’t even your employees.
Classify every employee correctly. It may seem easy to classify everyone the same way, but you’re giving away money when you do that. Administrative and clerical classifications will have different rates than warehouse workers and different statewide comparisons. This one change could save you a bundle.
Don’t pay anymore than you have to for your Charlotte workers compensation insurance. Lower your claims and classify your employees correctly and you may be surprised at how much you save.
If you’ve got questions about your workers’ compensation policy or you want a quote for a new policy, contact Charlotte Insurance today. We’re here to help you and your business.