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Safety Person Should Be Most Concerned With This Number

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A Safety Person vs. The X-Mod or E-Mod

Is there one number that a safety person should be the most concerned with in their job?  I have asked this question often when presenting to Loss Prevention, Safety Engineers and similar positions. The answers that I often hear are:

Vector Graphic Of Safety Person Workers
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  • Number of accidents
  • Lost workdays
  • Self-inspection results

Those are all important. When a VP or President of a company asks me what number is the most important in evaluating a Work Comp program, I always say the Experience Modification Factor (E-Mod or X-Mod). Why? Because it is the distilled number of what the claims costs are for a certain company. In other words, it is the insurance carrier’s notation of how the safety program is performing over a few years, not just one.

Many safety personnel have been fired due to the E-Mod X-Mod not turning around quickly enough.   Employers and their safety departments sometimes do not realize that the Mod covers from four years ago until one year ago. 

What just happened in the prior year, be it good or bad, does not show up on the E-Mod X-Mod until the following year.  A great way to avoid concerns with the safety department or risk manager is to forecast the Experience Mods into the future.      

Oh, and self-insureds are not immune from the E-Mod. There is a different term for the E-Mod for self-insureds and it is the Loss Development Factor (LDF). The LDF may cover more years than the E-Mod, but it is still the ultimate evaluator of a company’s safety program.

I often hear from safety personnel that the insurance is “some other department’s problem.” Nothing could be further from the truth.

Bottom Line – The LDF or E-Mod/X-Mod is the Workers Comp safety program’s effectiveness turned into cash.

Next Up – How long does one bad year of claims cost a company’s Workers’ Comp program?

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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