When businesses look to obtain commercial insurance, potential insurers look at the history of the company and any claims filed before issuing a quote. They also take into account potential risks and probability of future claims, using EMR workers comp information to determine areas of concern before accepting the client.
What is EMR?
Insurance carriers rely on the Experience Modification Rating to theorize the risks associated with accepting a new business. This rating analyzes the actual losses experienced by a company and compare it with the expected losses that had been established according to payroll and employment codes. More than 700 classification codes exist in finding an EMR, and these codes are defined by the National Council on Compensation Insurance (NCCI). Insurers collect EMR data for the past three years when doing their audit.
What is a Good Rating?
Theoretically, businesses with lower degrees of danger should have lower dollar-for-dollar losses because of the lower risk involved with job duties. Construction companies would have higher expected loss than a clerical company. A score of 1.0 is a standard, low risk venture. Anything below a 1.0 indicates a better-than-average reputation with loss and claims, while a score higher than 1.0 warns of worse-than-average performance.
Ratings associated with EMR workers comp can affect the cost of a policy’s premium. The rating system is designed to encourage companies to be more proactive in promoting safety, and by doing so, potentially lower the cost of claims and the EMR rating.