Companies that take a proactive approach to safety and claims handling understand the long-term effects that Experience Modification Rate (EMR) has on profitability and the ability to win contracts. An EMR of 1.0 is considered the security industry standard. What happens when you are about to renew your Workers Compensation (WC) coverage and you are informed that the new EMR is at 1.20? This means that you will pay 20% more for every dollar of WC coverage.
Let’s get back to the original question of “How does an EMR determine profitability?” Let’s say that you pay $200,000 in workers comp premium. At renewal the EMR is published at 1.20. This means that your new work comp premium is $240,000. Let’s compare this to your competitor: They have the same payroll and work comp rate but have an EMR of 0.80. Your competitor pays $160,000. That’s an $80,000 advantage! This means that your competition can be more competitive to win the most sought-after contracts.
How do you reduce the work comp burden of a high EMR? You can always “shop around” for the cheapest WC rate, but at some point you will have to deal with the root issues causing the increase in EMR. Did I mention the claim or claims that caused the EMR to increase stays on the EMR calculation for 3 years?
By performing a worker’s compensation audit, we can find the culprit that is causing the EMR issue. Once we have identified the issue(s), we will create a plan of action to reduce the EMR in 12 to 36 months. By simply taking action we have saved security guard companies 100’s of thousands of dollars in future work comp premium.
The sooner you take action, the sooner you can reduce your WC burden.
Contact me today to find out more.
Craig Mount
GuardPro Ins
Phone: 949-330-9741
cmount@guardproins.com
