Buying a NY workers comp policy for your small business is a bit different from buying other types of insurance. With most types of commercial insurance, it’s fine to just get quotes from a few companies and then go with the lowest one. The workers compensation policy is a little more complicated because it depends on a number insurance companies use for your business called the experience modification factor.
The experience modification number is based on a mathematical analysis of over the past three years of your business’s losses and payroll. A low number shows that you are doing well in terms of workers compensation costs while a high number is bad. It essentially means that you’ll pay more for your coverage than the standard rate for your industry.
The experience modification number is calculated by using an actuarial formula. Information about the losses you claimed over the past three years, the type of losses they were and the losses you are expected to have in the future are some of the data used in the calculation.
Your mod analysis worksheet, available from your insurance carrier, provides your company’s ex mod each year it is published. This a valuable document because it can show you areas for improvement and also help you better understand why your workers compensations costs are what they are. By making changes to your workplace environment and safety procedures, you may be able to save in the future simply by keeping claims and their expenses low.
Take time to review your experience modification, and if you need help understanding the elements that go into calculating ex-mod, contact us at Enforce Coverage Group. Our qualified insurance professionals will help you analyze your present ex-mod and help you discover ways to improve your loss ratios all with the goal of helping you save on your New York workers comp insurance costs.