Are You Taking Control Of The Price Of Your Workers’ Compensation Insurance?
Tyler Vandeberghe, Sales Leader
There is no getting around Workers’ Compensation Insurance, this coverage is statutory and the premium expense goes straight to the organization’s bottom line. An organization’s claim experience affects their premium as a result of their experience modification (E-Mod). The E-Mod rating is a direct multiplier of the premium an organization pays for Workers’ Compensation.
The E-Mod consists of the expected losses (driven by payrolls) divided by the actual losses (all claims including open reserves). Everything from split points, to payroll reporting, class codes, injury codes, and the actual claim itself moves through human hands and humans inherently make mistakes. An organization’s experience modification worksheet needs to continually be monitored, and if it isn’t, the question isn’t if, but when, a mistake is overlooked.
The E-Mod valuation date is crucial. States promulgate the experience rating worksheets 4-6 months in advance from your renewal date. After it’s promulgated, if there is a mistake, an organization could potentially overpay on the upcoming renewal. One missed mistake could have a substantial impact on an organization’s balance sheet.
Last, with updated payroll and claim activity, E-Mod projections can be done to show organizations what their E-Mod will be the next year, allowing them to effectively budget and if they are a contractor, bid for jobs. Implementing safety procedures and following the recommendations of a carrier is only one way to help with the cost of insurance. But, if your experience mod is incorrect, Brown & Brown can help with that.