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Experience Mod Of 1.01 Can Cost Company Millions – Important


Experience Mod Of 1.01 Can Negate Large Private or Government Contracts

An Experience Mod of 1.01 does not necessarily indicate that a company operates unsafely.   We have received many questions over the last three to your years on this situation.

Picture Man Ladder of Insurance Experience Mod Posting
Wikimedia Commons – British Library

Over the past 30 years, I have presented and wrote how an X-Mod is like a credit score from hell.

Government and now even private contracts require an employer to have a 1.0 Mod or less.   Does an employer with a  1.01 Mod versus one with a .99 E-Mod denote a better level of safety?   Many contractors are caught on the outside looking in for having such a Mod.

One has to agree that dealing with an unsafe subcontractor can cost the Risk Manager’s organization dearly.   The Ladder of Insurance (c) shows how a contractor can be responsible for employees they never knew that had on staff.

Then again, to eliminate a good subcontractor that has a 1.05 Mod my not be providing the best value to that Risk Manager’s organization.

I had just got off the phone with  a very large contracting firm in this very situation when I decided to write this article,  What is a contractor to do?  This contractor had a Schedule Credit Rating Factor which helped reduce their Workers Comp premium.   Then again, the amount of premium saving was paltry compared to the inability to bid on certain contracts.

Businesswoman Experience Mod With Document

There exists a large alternate market which includes Self Insurance, PEO’s, Captives, Large Deductibles that may be worth pursuing to possibly remove the employer from the Experience  Mod System.

The most effective method would be the re-doubling of safety efforts to reduce the Mod back at or below 1.0.   How much safety funding would bring the Mod below 1.0 when one bad year can push it above 1.0?  That is the employer’s conundrum.

To the government and large private contract bidders – good luck with your Experience Mod.

2020 Update –

The 1.0 Experience Mod remains a statistic that large companies and governmental RFPs review to decide if a bidder stays in the running for a big project.  Do not think if your company is an incumbent bidder that an Experience Mod of 1.01 or greater will not be taken into account.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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