Why Your Workers Compensation Experience Modification Is More Than A Rating Factor…It's A Financial Ball-and-Chain

Your workers compensation experience modification is much more than a premium rating factor, going up or down year to year. It truly is a financial ball-and-chain with huge financial ramifications.

The best way to understand this point is by example. Let's assume that in 2004 you had a large worker injury claim in the amount of $62,250. You report the claim immediately, the employee receives adequate medical care, but still requires surgery and is off work for 2 months. The chart below shows the financial impact of this claim through your “mod:”

Even though this claim occurred in policy year 2004, your company would pay … almost like an installment plan … $11,670 per year for three years. This is because, starting in policy year 2006, this claim first starts to effect your workers compensation modification calculations. And, like a ball-and-chain, this will have a financial impact on your company for three (3) years. So, while the claim actually occurred in 2004 you are not through paying for it until 2008! In this example you would pay $35,010 additional premium over the period 2006 - 2008 through your workers compensation experience modification.

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There are literally over 100 different factors that make up your workers compensation experience modification and any one of them can create thousands of dollars in audit errors. To learn about some of these premium factors, get our FREE white paper titled: “Understanding How Your Workers Compensation Experience Modification Is Calculated.” All information will be kept confidential in accordance with our Privacy Policy. After completing the form below you can immediately download and view the white paper.