EMR Reduction Consulting
Reducing your Experience Modification Rate (EMR) is good for a company because it directly impacts both cost control and business opportunities. Here’s why it matters and how it benefits a company financially:
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Direct Financial Savings on Workers’ Compensation Premiums
- How EMR works:
Your EMR is a factor used by insurance carriers to determine your workers’ compensation premium.- EMR = 1.0 → You pay the standard premium.
- EMR < 1.0 → You get a discount.
- EMR > 1.0 → You pay a surcharge.
- Example:
If your base premium is $100,000 and your EMR drops from 1.20 to 0.80, you could save around $40,000 annually in insurance costs.
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Increased Competitiveness for Contracts
- Many large companies, municipalities, and government agencies require a low EMR (often ≤ 1.0) to bid on jobs.
- A high EMR can disqualify you from bidding, costing potential revenue.
- A lower EMR signals fewer accidents and safer operations, which builds trust with potential clients.
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Reduced Indirect Costs
- Workplace injuries carry hidden costs not covered by insurance, such as:
- Lost productivity
- Overtime for replacement workers
- Training costs for new hires
- Delays in project timelines
- Lowering your EMR means fewer injuries, which reduces these indirect expenses, sometimes by 2–4 times the direct claim cost.
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Better Employee Morale & Retention
- A safer workplace means employees feel valued and protected.
- This reduces turnover, absenteeism, and the cost of replacing skilled workers.
- A positive safety reputation can also help recruit higher-quality employees.
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Long-Term Insurance Stability
- Insurance carriers often offer better rates and terms to companies with consistently low EMRs.
- A low EMR can prevent rate spikes after an incident, keeping costs predictable and easier to budget.