Experience rating is the main pricing component of your workers’ compensation policy and something that you can directly impact. It’s essentially a method for determining whether your business’ losses are better or worse than expected.

The state rating bureau or the National Council on Compensation Insurance (NCCI), an organization that administers workers’ compensation on behalf of most states, evaluates your business’ loss and payroll history and compares your loss experience with the average loss experience in your industry. From that data, an experience modification (or ex-mod or mod) is created. Your experience mod is unique to your business. This factor will either increase or decrease your overall workers’ compensation premium. If your mod is over 1.0, your business compares unfavorably to other businesses in your industry. If your mod is below 1.0, your business compares favorably to other businesses in your industry.

Proactive injury and accident prevention and claim management are the keys to improving your loss experience and mod. Your safety and loss prevention program should include the following:

A robust hiring & orientation program

• Perform a job analysis that includes specific tasks and any physical requirements
• Hire employees who are both mentally and physically fit for the job
• Train each employee on the requirements of the job as well as their responsibility for safety
• Enforce compliance with these responsibilities
  

A written safety program

• Include safe vehicle operation, proper lifting techniques, safe use of tools and equipment, warehouse/dock safety and regulatory compliance
• Identify who is responsible for the program and communicate the requirements to workers
• The policy should include rewards and disciplinary measures with worker sign off

Regular training and safety meetings

• Online, as a group or one-on-one meetings
• Remind employees of safe practices they have already learned
• Introduce and build awareness of new techniques, equipment or regulations
• Document attendance and completion for all types of training through electronic or manual records

All incidents investigated using root cause analysis and corrective action techniques

• Should be conducted by someone with a solid understanding of what facts to gather and what to look for
• Determine root causes and what steps to take next
• Use a form to document findings

A behavior observation program that provides on-the-spot feedback to workers

• Observe workers on the road driving and while walking and working
• Determine if they are taking safety training to heart
• Creates an opportunity to provide feedback on performance and correct unsafe behaviors as they happen
• Use a form to document findings

Required seatbelt usage and/or have high visibility seatbelts

• Seatbelt usage should be mandatory
• Consider installing high visibility seatbelts or use retrofit sleeves to heighten awareness

Slip-resistant shoes

Slips and falls may seem like minor incidents but they can escalate into very serious injuries

• Wear appropriate slip-resistant shoes
• Periodically check the condition of the soles
• Replace them as they wear down

A formal written return-to-work program

• Appropriate for the scope of the injured employee.
• Transitional duty programs that help injured employees return to a productive position as soon as medically approved
• Work closely with your claims adjuster to understand what’s available under law in your state

Download our brochure to learn how your experience mod is calculated and how to gauge your performance compared to others in your industry.