The purpose of this audio is to enlighten business owners on something known as the experience modification factor that is on virtually every workers’ compensation policy. This is often a mysterious number that employers don’t understand.

The Institute trains and certifies insurance agents to help employers understand, number one, whether or not there experience modification factor is correct, because often times it is simply wrong. Number two, how to manage the experience modification factor because there is a couple of very specific steps that employers can take that can drive down their mod, even without changing any of the claims activity that has happened over the past several years. And thirdly, what our agents assist employers in doing, is understanding through a couple of reports, how the experience modification factor affects their overall cost. And through this factor, employers ultimately end up paying for all of their work related injuries.

As I mentioned in a previous audio, the insurance companies ultimately do not pay for work-related injuries. The employer pays for those injuries in almost all cases because of the impact on the experience modification factor. We have even found that in some industries, employers and their businesses are not allowed to even bid on certain contracts or for certain types of business if their experience modification factor is over 1.0. So the management of the experience modification factor, the techniques and the strategies that we certify agents and train agents who help employers, those strategies could be critical as to whether or not a business can even stay in the game and secure new business because of their experience modification factor.

It is often a mysterious and complex area. However, very clear, very simple steps can help employers in doing the following: Number one – verifying that it’s accurate. We find that errors frequently occur and employers pay the greater impact on an incorrect experience modification factor than they should have to. Number two, managing it. Simple steps, clear steps, affective steps to reduce that experience modification factor down to as low as it can possibly be. And thirdly, understanding the impact that the experience modification factor has as it relates to every single injury, as it relates to the practices of that business and it gives insight to employers on how they can change certain things to have a positive impact on their ultimate net cost of work-related injuries.