Sims Crane & Equipment Co. has earned a significant reduction in its insurance premium, due to its on-the-job safety score. The firm’s Experience Modification Rate (EMR) is .68, meaning its insurance premiums will be 68 percent of the premiums required from less safe companies.
“The EMR is a rigorous standard set by insurance companies and the state, so having those outside third parties attest to our superior workplace safety practices and our culture of safety at Sims is a credit to everyone who works here,” says Dean Sims II, VP of marketing at Sims Crane & Equipment.
The EMR is a gauge of both past cost of injuries and future probability of injuries. An EMR of 1.0 is considered industry average. The lower the EMR, the lower the firm’s worker compensation insurance premiums will be.
The EMR is designed to measure whether a company’s workers’ compensation losses are better or worse than expected. If the experience is worse than expected, a company is punished with a high EMR greater than 1.0. If the experience is better than expected, a company is rewarded with a low EMR below 1.0, paying less for workers compensation premium than a company with a high EMR.
“In Florida, Workers Compensation rates are ultimately determined by the Florida State Department of Insurance. The only real mechanism to apply either good or bad loss experience to the premium calculation is through the experience modifier,” says Randy Proos, USI Insurance Services, Coral Gables, Fla..
The EMR is calculated by a rating bureau, the National Council on Compensation Insurance, using three years of past loss history, excluding the immediate past year. The 2014 EMR is calculated using the 2012, 2011, 2010 loss experience.
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