EMR stands for Experience Modification Rating. It is used to evaluate the future chances of a company filing insurance claims based on past claim filing. Knowing how EMR workers comp works can help you lower your rates through claims reduction. Insurance companies use EMR values to encourage safe, effective workplace operations maximizing worker safety.
Dividing losses actually incurred over future potential claims provides insurance companies with the EMR rating. The expected losses is based on the current payroll numbers and the classification codes of employees to project future claims. When the value is over 1.00, clients are considered more at risk resulting in higher rates. Those with a lower score tend to have lower premiums. EMR values are calculated relative to similar companies within the same industry.
The EMR can affect your rates for the insurance for a period of three years. Keeping claims low can improve the number lowering your rates and saving you money. The smaller the company the greater chance of improving the EMR value faster.
Work to improve your EMR workers comp rating before the next policy analysis to lower your rates. Improving safety in the workplace can improve the EMR by lowering the number of claims. A nice side effect is healthier employees.