Workers’ compensation costs can make or break your bottom line. But control over these costs is more attainable than you may think if you understand your experience modification factor and its effect on your insurance premium.
An experience modification factor—also known as a mod factor—represents either a credit or debit that is applied to your workers’ compensation premium. Since your mod factor directly impacts premium costs, it’s vital to keep it under control.
You may not know it, but you do have control over your mod factor—and control over your workers’ compensation premium. Your mod is calculated based on data reported to the rating bureau by past insurers. Incorrect or incomplete data can cause inaccurate mod factors. Review your loss and payroll data to ensure that your calculation is complete and accurate.
You can also control your mod factor by encouraging everyone to focus on safety—especially management and anyone else who is involved in controlling costs. Everyone working safely means fewer accidents to report to your insurance carrier and a lower mod factor.
If workers’ compensation costs are hurting you financially or if you want to learn more about how your mod impacts your premiums, contact us at ProAction Insurance Services for the resources, policies and guides you need to keep your costs in check. We’re here to help you protect your company and your bottom line.