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.
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.
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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