If you have ever dealt with Workers’Comp insurance, you know your E-Mod has a big impact on your insurance premium.
Let’s take a step back and talk about the basic factors that are used to calculate your work comp premium before we get too “insurancy” with E-Mod details.
Work comp premiums are computed using three primary factors:
1. Payroll – for each class code on an annual basis
2. Rate – per class code
3. Experience Modification Factor (E-Mod) – an adjustment of annual premium based on previous loss experience, usually representing the business’ prior three-year loss history. Only those businesses reaching a specified threshold of work comp premium are assigned a Work Comp E-Mod. Work Comp.
Premium = Payroll x Rate x E-Mod (+ or – any credits or debits applied by a specific insurer).