Arroyo Insurance Programs

Learning About Your Company’s Ex Mod

Business owners must be sure to budget for Workers’ Compensation premiums, particularly if employees work in hazardous environments. These premium payments are a type of ex mod insurance or insurance that is affected by a business’s experience modification factor.

What Is a Company’s Ex Mod?

An ex mod factor is a percentage that reflects how safe a company’s work environment is compared to other businesses in the area. Just like a person’s automobile insurance premiums are higher if he or she has been in multiple accidents, a company that has repeated workplace injuries will have to pay higher Workers’ Compensation premiums. The exact number is calculated based on the average amount of a company’s payroll as well as the company’s safety level.

Can Companies Alter Their Ex Mods?

The experts at Arroyo Insurance Programs note that a company’s ex mod can change. If a business’s ex mod results in high premiums, taking the following actions can affect the percentage:

  • Decreasing response times to employees’ claims
  • Increasing the availability of help to injured employees
  • Ensuring that accurate payroll and claim information is reported to the agency that calculates ex mods
  • Developing a safer workplace environment

It may take some time to see the benefits of these actions, but they are essential for companies that have ex mod insurance.

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