The experience modification rate, commonly called EMR or mod rate, is a multiplier applied to your workers compensation premium that reflects your company's claims history compared to the industry average for businesses of similar size and classification. An EMR of 1.0 means your claims experience matches the average. Below 1.0 means you have fewer or less severe claims than average and pay less; above 1.0 means the opposite. For roofing contractors, the EMR is one of the most scrutinized metrics in the industry.
Your EMR is calculated by the National Council on Compensation Insurance (NCCI) or your state's equivalent rating bureau based on three years of claims data, excluding the most recent year. The formula weighs both the frequency and severity of claims, with frequency weighted more heavily because frequent small claims are considered a stronger predictor of future large losses than a single large claim. A single serious fall injury can push your EMR above 1.0 for three policy years.
Many general contractors set maximum EMR thresholds for subcontractor prequalification, typically 1.0 or lower. An EMR above the threshold can disqualify you from bidding on commercial projects regardless of your price, reputation, or capabilities. To manage your EMR, invest in documented safety programs, enforce fall protection compliance, implement return-to-work programs for injured workers, and report claims promptly with detailed documentation. Some contractors also use safety groups or loss-sensitive programs to gain more control over their workers comp costs and claims management.