Your experience modification factor, or mod, is an important part of figuring out how much you pay for workers’ compensation insurance. If you can lower your mod, you might be able to lower your premium. 

What Is an Experience Mod? 

An experience modification factor (also called a mod or ex-mod) is a number that shows how your business compares to others in your industry when it comes to workplace losses (like injuries). 

• If your mod is below 1.0, it means your business has fewer losses than similar businesses. 

• If your mod is above 1.0, it means your business has more losses than average.   

How Is My Mod Calculated? 

Your mod is calculated by either the National Council on Compensation Insurance (NCCI) or your state’s Rating Bureau. These organizations look at: 

• Your business’ loss history (the number and cost of workplace injuries or claims). 

• Your payroll history (how much you pay your employees). 

• They compare this information to other businesses of the same size and industry. 

Why Is Your Mod Important? 

Your mod directly affects how much you pay for workers’ compensation insurance. A lower mod means you’re doing better than other businesses in your industry, which can lower your premium. A higher mod means you may pay more.   

Tips to Keep Your Mod Low 

You can maintain a mod that’s less than 1.0 by focusing on safety and good practices. Here are some tips: 

• Hire carefully: Use strong hiring practices to find employees who will work safely. 

• Hold safety meetings: Regularly train employees on workplace safety. 

• Observe behaviors: Watch how employees, especially drivers, perform their tasks to ensure safe practices.   

Factors to Keep in Mind 

Here are some key details about how mods work: 

• Not all businesses qualify for an experience rating. Your eligibility depends on the size of your workers’ compensation premium, which varies by state. 

• The mod is based on your loss history over the past three years, not including the most recent year.

• Each workplace injury or loss affects your mod for three years. 

• Frequent small losses have a bigger impact on your mod than one large loss. 

• Getting injured employees back to work quickly can save you money and improve your mod.   

How Can You Improve Your Mod? 

Improving your mod takes effort, but it’s worth it. Here’s what you can do: 

Investigate and Report Accidents 

• Investigate accidents right away and fix any hazards. 

• Watch for signs of fraud. 

• Report all claims to your insurance carrier as soon as possible. 

• Stay in touch with the claims adjuster to resolve claims quickly. 

Help Injured Employees Return to Work 

• Offer light-duty work to injured employees as soon as their doctor allows it. 

• Supervise light-duty workers to make sure they follow any restrictions. 

• For serious injuries, work with the claims adjuster to help employees return to work as soon as possible. 

Focus on Safety 

• Set safety performance goals for supervisors and include safety in their performance reviews. 

• Create a written safety program and train employees on their responsibilities. 

• Include a disciplinary policy to hold employees accountable for breaking safety rules and reward them for following safety procedures. 

• Regularly remind employees about the importance of safety. 

Stay Organized 

• Make safety a priority for everyone, especially senior management. 

• Review your accident history and near-misses every month. Look for patterns and fix the biggest problems first.   

By following these tips and focusing on safety, you can lower your mod, save money, and create a safer workplace for everyone.