Your mod factor has a direct impact on your workers’ compensation premium. The loss-free rating value shows you how low your mod could be if you had no losses. The key to achieving the lowest possible mod and thus controlling your insurance costs is accident prevention.
1. The mod is calculated based on data reported to the rating bureau by past insurers. Incorrect or incomplete data can cause incorrect mod factors. Review loss and payroll data to ensure the calculation is complete and accurate.
2. Losses remain in the experience rating formula for three years. The experience modification factor is influenced more by small, frequent losses than by large, infrequent ones.
4. Develop a sound safety program, return to work program and appropriate prevention procedures to reduce loss frequency.
5. An effective self-inspection and accident investigation program are critical to managing claim frequency.
6. Implement an active claims management program to manage outstanding reserves and focus on efficiently resolving open claims.
7. Report all claims to your carrier immediately.
8. Take an aggressive approach to providing light duty to all injured employees upon their release from treatment.
9. Set safety performance goals for supervisory roles. Success in achieving safety goals should be used as one measure during performance appraisals.
10. Train employees on their responsibilities for safety, and enforce violations.
11. Frequently communicate with employees on a formal and informal basis regarding the importance of safety.
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