Your worker’s compensation premiums depend greatly on your experience modification rating. This calculation is in indicator of how much overall risk your company poses to the insurance company that provides your policy. Understanding your EMR can help you keep premiums as low as possible.
When you launch a new business, you typically get an EMR of 1.00 for the first three years. After that, however, it can fluctuate. This potential change depends on two factors:
- The classification rate of the jobs on your payroll
- The reported claims on your policy
Each job has a particular classification rate. This rate is based on tasks required to do the job. A job that has a higher inherent safety risk, such as a electrical maintenance worker, is going to have a higher classification rate.
The experts at Northstar Insurance recommend improving safety as the best way to lower your EMR workers comp. Even if you work in a high-risk industry, a consistently great safety record can lower your EMR over time. Make sure your employees understand and practice all safety protocols.
You cannot alter the classification rate of jobs at your company, but you can implement policies that keep your employees as safe as possible. Doing so can also lower your EMR and thus your workers comp premiums.