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.