MOD and How It Impacts Your Workers’ Compensation Insurance Premiums
When it comes to workers compensation insurances, the one issue that has proved to be a concern to all is the premiums that they will have to pay for the cover. By and large, the last year saw a staggering $45 billion and over paid in premiums by business to the insurance companies to service their workers comp plans and this is not including the much that were paid to the state workers comp plans and funds, clearly showing high figures going into these plans from businesses.
By law, the provision for the workers compensation insurance plan is a must and must be met by all businesses in the United States. The premiums paid for these are a percentage of the payroll and the calculation of the premiums is a matter based on the risk level. Reading this, what we see is that the workers compensation calculation is a flat percentage rate of the projected payroll and there are other factors such as the business claims experience and the like that would as well come to modify this particular percentage. The mods in most cases are determined by the company’s previous injury claims as it is often the case with most companies.
Of course any good insurance brokerage will have a fair appreciation and understanding of the need there is in any business to pay the lowest possible premiums even for this particular mandatory coverage anyway. As a result of this, most brokers have been in the habit of competing on low bids. Sad though is the fact that for the insurance brokers who make this their only focus often miss out on the chance to educate the employers on the impact that mods have on their insurance premiums at the end of the day. Besides this, they as well fail to let them know how lowering their mod in such steps as improving their safety in the workplace, hiring and as well return to work and the other aspects can help them finally improve their workers’ comp costs at the end of the day.
Generally, as a brokerage we do appreciate the fact that as a business you are in it for the sake of your bottom line and you want to have the healthiest bottom line at the end of the day and it is for this reason that we give below some quick tips on how you can get to improve and boost it as much as you can by taking a look at your mod and how it affects your workers compensation premiums. One thing that you need to understand and appreciate at the end of the day is that your experience modification factor, mod, is such an important component in the calculation of your workers comp premiums and as such you should be very particular with it.