Experience modification rate

What the number actually compares

Your subcontract asks for an EMR, a prequalification form has a box for it, and a sub has just written 0.92 in that box. Before you decide whether that is good, it helps to know what it is a ratio of. The rating bureau takes the claims that subcontractor's workers' compensation policy actually paid over a period, and divides them by the claims expected for a business of their size doing their kind of work. Expected is the operative word: a roofing contractor and an accounting firm are not compared to each other, they are each compared to their own class.

So the mod is not a safety score in the abstract. It is a claims record, measured against a peer group, expressed as a multiplier on their premium. At 1.00 they are paying the class rate. At 0.85 they pay 15% less than a company their size in their trade; at 1.25 they pay 25% more. That premium effect is why subs care about it, and the reason they will usually know their number without having to look it up.

Why frequency counts more than severity

This is the part that surprises people, and it is the most useful thing to understand about the number. The formula splits every claim into two pieces — a primary portion, being the first slice of the claim's cost, and an excess portion, being everything above it. Primary losses count in full. Excess losses are heavily discounted before they reach the calculation.

The consequence is counter-intuitive: a contractor with one catastrophic claim can come out with a better mod than a contractor with a run of small ones. That is by design. A single severe accident carries a large element of chance, whereas a steady trickle of strains, lacerations and falls is a much better predictor of what next year will look like. The mod is built to measure how often something goes wrong, not how expensive the worst thing was.

The lag, and why it matters on a bid

A mod is not current. It is calculated from roughly three policy years of claims, and the most recent year is deliberately left out — claims take time to develop, and a year that is still open would be measured before anyone knows what it cost. The practical effect is that the number on a sub's 2026 rating worksheet is describing injuries from several years earlier.

That cuts both ways and both are worth knowing at the point you are choosing between two bids. A subcontractor who genuinely overhauled their safety program last year is still carrying the old number and will be for a while. And a subcontractor whose bad year has just rolled out of the window looks materially better this month than they did last, with nothing having changed on site. Asking when their last claim was is a fairer question than reading the mod alone.

It is not on the certificate — so ask for the worksheet

The ACORD 25 has no EMR field. It shows coverage — carriers, policy numbers, limits, dates — and the mod is a rating input, not a coverage term, so it has no box on the form and never appears there. The certificate that proves your sub carries workers' comp will not tell you what their claims history looks like; the document that does is their loss runs, which is the raw data this number is computed from.

That leaves two ways to get it, and they are not equally good. The first is the box on your own prequalification form, which produces a number the subcontractor typed. The second is the experience rating worksheet issued by the rating bureau — the document that shows the mod, the period it covers and the claims behind it. Ask their agent for that sheet. It is the same move this site recommends for an endorsement rather than a certificate: ask for the document that carries the fact, not a summary of it.

Who has a mod, and who does not

Not every employer is experience-rated. Below a premium threshold — which varies by state — there is not enough data for the calculation to mean anything, so no mod is produced and the employer simply pays the class rate. Small crews frequently fall under it.

• "We don't have one" is usually true and usually fine. A two-person outfit is often below the rating threshold. It is not the same answer as declining to provide it.
• A sub with a [workers' comp exemption](/glossary/workers-comp-exemption) has no mod either, for the more fundamental reason that they have no comp policy. That is a separate exposure and a more important one.
• Who calculates it depends on the state. NCCI rates most of the country, but several states run their own independent bureau — California's is WCIRB — and their rules are not identical. A multi-state sub can carry more than one mod.
• In North Dakota, Ohio, Washington and Wyoming comp comes only from the state fund, which runs its own experience rating. It is not an NCCI mod and does not translate directly. Those are the same four states where employers liability is absent from the policy.

Using it as a threshold, honestly

A requirement of "EMR not greater than 1.00" is common, and it is a defensible line: it says you will not hire a subcontractor whose claims run worse than their trade's average. Two cautions, though, if you write that into a subcontract. It excludes every crew too small to be rated unless you say what happens to them, and it treats a number describing several-year-old claims as though it described this crew this month.

The more useful version pairs it with a question. Ask for the worksheet, note the mod, and ask what their last recordable injury was and what changed after it. A sub at 1.10 who can answer that clearly is often a better bet than one at 0.95 who cannot — and unlike the mod, the answer is about the crew who will actually be on your site.

Hi [Agent name],

[Sub name] is bidding with us on [Project], and our subcontract asks for their experience modification rate.

Could you send the current experience rating worksheet from the rating bureau — the sheet showing the mod, the rating effective date and the period it covers? A number on its own is hard for us to place without the dates.

If [Sub name] is below the threshold to be experience-rated, just confirming that in writing is fine.

Thanks,
[Your name], [Your company]