How Can You Impact Your Modifier?


The good news is that you have some control over your experience modifier. Here are a few helpful steps you can take to improve it:
 

Focus on Safety:
 

  • Implement robust safety programs tailored to your industry.
  • Conduct regular safety training for employees and management.
  • Ensure compliance with OSHA regulations and other safety standards.
     

Investigate and Prevent Claims:
 

  • Promptly investigate workplace accidents to identify root causes.
  • Address hazards immediately to help prevent future incidents.
  • Develop a culture of safety where employees feel encouraged to report risks or near misses.
     

Return-to-Work Programs:
 

  • Establish a return-to-work program to help injured employees transition back into the workplace.
  • Light-duty roles or modified responsibilities can help reduce the length and cost of claims.
     

Monitor Claims Closely:
 

  • Work closely with your insurance provider to manage open claims efficiently.
  • Verify claims are accurate and legitimate to help avoid unnecessary costs.
     

Hire Strategically:
 

  • Screen new hires for safety awareness and physical capabilities for their roles.
  • Provide thorough onboarding and training for all employees.
     

Review Payroll Classifications:
 

  • Ensure employees are classified correctly for workers’ compensation purposes, as errors can inflate your costs.
     

Note: the above represents strategies a company might consider to help lower its experience modifier.  This list is not exhaustive and should not be considered a comprehensive guide; companies should consult a qualified insurance or risk management professional for advice tailored to their specific situation. 
 

Lowering your experience modifier doesn’t just help you save money on insurance—it can position your business as a safer, more reliable partner. A strong safety record reflected in a low modifier not only helps reduce costs but also enhances your credibility in the eyes of customers, employees, and stakeholders.

Why Your Modifier Matters?

Your experience modifier doesn’t just affect your insurance premiums—it can also influence your ability to secure business. Many customers, especially those in industries like construction, manufacturing, and logistics, evaluate a company’s safety performance as part of their vendor qualification process. If your experience modifier is too high, you may be deemed a higher risk and ineligible for their qualified vendor list.
 

On the other hand, a favorable experience modifier can be a powerful differentiator, signaling your commitment to safety and operational excellence. It can open doors to work with top-tier clients who prioritize partnering with companies that demonstrate strong safety records and risk management practices. In some cases, a low modifier might even be the deciding factor in landing a lucrative contract. Prioritizing your experience modifier is more than a cost-saving measure—it can be an investment in your business’s reputation and growth.

How Does Your Experience Modifier Impact Your Insurance Rates?

Insurance companies use your experience modifier to adjust the base premium rate for your workers’ compensation policy. A higher experience mod means you’ll typically pay more for coverage, while a lower mod can result in substantial savings.
 

To put it into perspective, here is an illustrative example:

  • If your workers’ compensation base premium is $100,000 and your experience modifier is 1.2, your adjusted premium will be $120,000.
  • Conversely, if your mod is 0.8, your adjusted premium will be $80,000.
     

This means your experience modifier can have a significant impact on your annual workers’ compensation insurance costs.

What Is an Experience Modifier?

The experience modifier is a numerical rating used by insurance companies to assess the risk of a business compared to others in the same industry. It is based on your company’s actual claims history and payroll data over the past few years, typically three years excluding the most recent policy year.

An experience modifier of:

  • 1.0 indicates your claims history is average for your industry.
  • Below 1.0 reflects better-than-average claims performance, leading to lower premiums.
  • Above 1.0 signals higher-than-average claims, resulting in higher premiums.
     

For example, a company with an experience modifier of 0.80 will typically pay 20% less in workers’ compensation premiums than average, while a company with a mod of 1.20 will typically pay 20% more.
 

Note that not all businesses are experienced rated.  Several factors determine whether a business is eligible for or subject to an experience mod, including whether it is a new venture, the amount of premium generated, its classification codes, and other state specific considerations.

Quote graphical icon.

Insurance companies use your experience modifier to adjust the base premium rate for your workers’ compensation policy. 

For more information call your Keevily Team 1-800-523-5516