Here are TKTKTk reasons why your experience modification rating went up.
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An Experience Modification Rating is a numeric representation of a business’s claims history and safety record compared to other businesses in the same industry, within the same state. The claims, for the most part in most states, are taken in to consideration for a three year period not including the previous year. The previous year is not included in order to prevent claims that have recently happened or may still be open to be included in the rating. The bad side to this way of evaluating a business is that the business is penalized for injuries that occurred three and a half years prior.
You have a claim that could be closed, but isn’t
The Underwriter who manages your account with your Insurance Carrier leaves a claim open after an injured worker returns to full time work. They do this for a reason because if the employee reinjures themselves and has to return to getting workers compensation benefits, it is less damaging to the business to have one total claim than to have two claims that each may be smaller. The experience modification rating deals with both frequency and severity of claims. If you have two claims for this one injury it will impact your rating in both terms. Approaching your underwriter about any opened claims a month or so before you go to purchase coverage again might be a wise decision to control your rating in the future.
Expected Loss Changes
Expected losses are calculated by the total amount of your payroll, divided by 100, and multiplied by the expected loss rate for each job classification. The expected loss for your company can be affected by an increase in payroll, an increase in the expected loss rate, or a change or addition in job classifications for your business.
Your Classification Code changed
If your business has taken on new duties that you did not partake in, in the past; it may have caused your classification code to change.
Payroll Changes
As mentioned before, payroll increases can affect your expected loss which can cause an increase in your ex mod. Look at why payroll increased and if your workers’ comp claims increased at the same time. Did you need to hire more people to keep up with demand and an improving economy? Wonderful! But were the best people hired and were they well-trained in safety protocols for your company? New employees mean higher payroll, but it can also mean an increase in risk and workers’ comp claims.
Overall Losses
If you’re confused about how you had an increase of your ex mod when you’ve lowered your claims for the past couple of years, it helps to understand how ex mods and workers’ comp premiums are calculated. When determining your ex mod (and premium total), three years of losses are used. If your safety program is relatively new, and you lowered your number of claims or the total losses of each claim, that’s great, but it may not make up for losses you experienced the two years prior to that.