If you’ve ever received a workers’ comp quote and noticed a high premium, your experience modification rate, or mod, could be the reason why. Specifically, a higher mod in workers’ comp can significantly increase your insurance costs. But what exactly is a mod, how does it get calculated, and, most importantly, what can you do to lower it?
Let’s break it down.
What Is a Workers’ Comp Mod?
In simple terms, a mod is a number that reflects your company’s workers’ compensation claims history compared to similar businesses in your industry.
- A mod of 1.00 is considered average.
- A mod higher than 1.00 means your business has had more claims or more costly claims than your industry peers.
- A mod lower than 1.00 indicates better-than-average safety performance.
Insurance companies use your mod as a multiplier when calculating your premium. So, if your mod is 1.25, you’ll pay 25% more than a company with an average mod. That’s why understanding your higher mod workers’ comp label is essential.
Why Do Some Businesses Have a Higher Mod?
Several factors can contribute to a higher mod in workers’ comp, including:
- Frequent workplace injuries
- Severe or costly claims
- Lack of return-to-work programs
- Delayed claims reporting
- Poor safety practices or documentation
Even one large claim can have a major impact on your mod if it isn’t managed properly.
How a Higher Mod Affects Your Business
Having a higher workers’ comp mod doesn’t just raise your insurance premiums. It can also:
- Make it harder to qualify for new contracts (especially in construction or government work)
- Raise red flags with insurers and brokers
- Impact your profitability and competitiveness
That’s why businesses that want to reduce their costs and improve their safety need to take their mod seriously and actively work to improve it.
How to Lower a Higher Mod in Workers’ Comp
Here are some steps you can take to bring down your workers’ comp mod over time:
1. Improve Safety Practices
Prevention is the best strategy. Invest in safety training, regular audits, and a culture that encourages proactive risk reporting. Every Foresight policy includes our Safesite platform and coaching service which incorporates easy-to-use safety actions– all from your phone!
2. Report Injuries Promptly
Fast reporting leads to faster claims resolution, which can reduce overall costs.
3. Implement Return-to-Work Programs
Helping injured workers get back on the job (even in light-duty roles) keeps claim costs in check.
4. Use Technology to Manage Risk
Digital safety platforms like Foresight’s Safesite technology can help reduce incidents, track safety behaviors, and provide early intervention when risk trends emerge.
5. Review Loss Runs and Claim Data Regularly
Understanding where your claims are coming from helps you target areas for improvement. With a Foresight policy, your Safety Success Manager regularly reviews your loss run and claim data, all at no additional cost.
Foresight Can Help You Take Control of Your Mod
At Foresight, we work with safety-forward businesses to reduce incidents and control claim costs, which are two key drivers of your experience mod.
Our tech-enabled workers’ comp solution includes:
- A dedicated safety app & virtual coaching
- Powerful risk management tools
- Real-time insights to prevent injuries before they happen
Whether you’re looking to reduce your higher mod workers’ comp or prevent it from rising, Foresight is here to help.
Need a competitive quote or help navigating your higher mod workers’ comp options? Reach out to your insurance broker or find a broker today!
