The Challenges of High Ex-Mods
If you’re struggling to find and secure Workers’ Compensation coverage for your business, experience modification rates might play a role!
What are Ex-Mods?
Experience modification rates, which are commonly called ex-mods, are numerical values insurance carriers use to adjust Workers’ Compensation premiums. To determine ex-mods, insurance carriers look at factors like:
- Baseline premium rates, which are set by your state’s Workers’ Compensation authority
- Your Workers’ Compensation claims history, including the severity and cost of the claims
- How your claims history compares to other businesses in your region and industry
By looking at factors like these, an insurance company can get a sense of your level of risk. If your business is deemed low-risk, you’ll receive a lower ex-mod. On the other hand, if your business has many claims or a history of severe and costly workplace accidents, you’ll receive a high ex-mod.
The Challenges of High Ex-Mods
If your business has a high ex-mod, it can lead to many challenges. These include:
- Raised Workers’ Compensation premiums: If your business has a higher-than-average ex-mod, it can raise your Workers’ Compensation premium. This makes it difficult to find and secure Workers’ Compensation to protect your business and employees, as you might struggle to afford comprehensive coverage or find yourself feeling forced to accept subpar coverage options.
- Lapsed coverage: If your premium goes up due to high ex-mods, it can also make it harder to make payments on your Workers’ Compensation coverage. If you miss payments, it can lead to a lapse in your Workers’ Compensation coverage, which can make your business vulnerable to fines, lawsuits, and an increased risk of workplace accidents.
- Compliance issues: If your high ex-mods are due to a high rate of workplace accidents, it can also open your business up to compliance risks. For example, if your high rate of accidents is due to improper safety training or unsafe workplace policies, you might not be in compliance with laws from your state or industry. If you have compliance errors, it can lead to costly complications like fines and other penalties.
- Safety concerns: When your business has a high ex-mod, it may mean you need to take new steps to address safety at your business. If you don’t take the right steps, like improving worker safety training or offering necessary personal protective equipment, it puts your employees at a high risk of workplace accidents, ranging from sprains and strains to serious injuries like paralysis.
Help for High Ex-Mod Businesses
With challenges like these, businesses with high ex-mods might find themselves in need of extra assistance, especially when it comes to reducing risks and finding Workers’ Compensation coverage. At Work Comp Business Insurance Solutions, we help business owners find the best Workers’ Compensation and payroll solutions.To learn more about our services and how we can help your business, visit us online at https://www.wcbis.com.
