Why Safety Matters: Experience Modification Rates (EMR)
An Experience Modification Rate (EMR) is a factor developed by measuring the difference between an insured’s (CentiMark) actual past experience and the expected or actual experience of the class (Roofing 5551). It is a number used by insurance companies to gauge both past cost of injuries and future chances of risk.
NCCI (National Council on Compensation Insurance) is the agency that coordinates the EMR ratings. NCCI developed a complicated formula that considers the ratio between expected losses in your industry and what your actual company incurred, as well as both frequency of losses and severity of those losses over a three year period.
A company with one big loss is going to be penalized less severely than a company with smaller losses, because having many small losses is seen as a sign that you will face larger ones in the future.The losses in the experience period are compared to that expected for the average risk within that class.
The result is an Experience Rating Modification factor, which is either a reduction (credit) or increase (debit) in the premium charged to an insured. Essentially the EMR produces a premium that is more representative of the actual loss experience of an insured. A low EMR is a direct reflection of an effective company safety program that eliminates hazards and prevents injuries. Proper management of injuries and return to work programs help mitigate injury severity and keep costs down.
CentiMark EMR 2006-2019:
About National Safety Stand Down 2019
The National Safety Stand Down is organized by the Department of Labor to prevent falls in construction and accidents. Fatalities caused by falls from elevation continue to be a leading cause of death for construction employees, accounting for 366 of the 971 construction fatalities recorded in 2017 (BLS data). Those deaths were preventable. The National Safety Stand-Down raises fall hazard awareness across the country in an effort to stop fall fatalities and injuries.
Blog contributed by Michael Litzenburger, CentiMark Corporate Safety Manager, Canonsburg, PA, May 2019