Business insurance
The experience modification factor, or mod, adjusts a business's workers' compensation premium up or down by comparing its actual claims history with the expected losses for similar businesses in its classifications. A mod of 1.00 is average; below 1.00 earns a credit and above 1.00 adds a debit.
Most states use a mod calculated by NCCI, while some states run their own rating bureaus. Claim frequency usually weighs more heavily than severity, so a run of small claims can hurt a mod more than one large one. Return-to-work programs and safety work can bring it down over time.
The workers' compensation premium calculator does this math with the prospect's own numbers. Its useful inputs will be payroll by class code, the mod and any schedule credits, which together let a commercial producer judge whether a prospect's current premium looks out of line before requesting loss runs.
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