Worker’s Compensation Insurance: Understanding X Mods


One way insurance companies determine your business’s premium amount is by using something called the experience modification rate. Here is everything you need to know about the X mod

What Is It?

Insurance companies use the experience modifier to either raise or discount your premiums. The providers look at how often you experience losses, how severe those losses are, and how many employees you have. They typically look at this information over the past three years to reach their final score. 

How To Reduce Your Score?

The lower your experience modifier is, the better your premium is, so getting it as low as possible is to your benefit. You can reduce it by:

Starting an Accident Prevention Program

If you don’t have an accident prevention program, your insurance company will automatically consider you high risk. Create strict protocols and safety measures for your staff to follow and place signs around the business, ensuring everyone knows about them. 

Reducing Your Losses

While every company experiences losses, you want to keep yours to a minimum. Start a loss prevention program or hire security guards to patrol around your business. You could also use security tags on your inventory to help deter thieves. 

Understanding how to lower your X mod can make a big difference in your yearly worker’s compensation premiums. It’s worth it to take the time to change what you can, so you can see significant savings.