Workers’ Comp experience-mod impact calculator

How the experience mod works

The experience modification factor compares your actual Workers’ Comp losses to the losses expected for a business of your size and class. A mod of 1.00 means you’re average; below 1.00 earns a credit (you pay less than manual); above 1.00 is a debit (you pay more). It applies once you meet your state’s premium-size threshold.

• Primary vs. excess losses. The formula weights frequency (many small claims) more heavily than one large claim, because frequency predicts future losses. So several small injuries hurt your mod more than a single big one.
• Three-year window. Your mod uses the oldest three of the last four policy years, so a bad year keeps affecting you for a while — and improvements take a few years to fully show up.
• Why it matters beyond premium. Many general contractors and government contracts require a mod at or below a threshold (often 1.00) just to bid.

How to lower your mod

• Prevent frequency — a formal safety program targets the small, repeat claims that drive the mod.
• Manage claims fast — return-to-work / light-duty programs cut claim severity and duration.
• Consider paying very small medical-only claims out of pocket where your state allows (they still count).
• Audit your class codes — a misclassification inflates both your manual premium and your expected losses.

This is an educational impact estimate, not a rating worksheet or a quote. Reviewed by Jason Wootton, Licensed P&C Agent (NPN 7694718).