If you’re a Michigan business owner with employees, you know how important workers compensation insurance is—not just because it’s required, but because the cost can be a big factor in your bottom line.
One key piece of that cost is your
experience modification factor (often called the experience mod, e-mod, or simply “mod”, ).
A high mod means higher premiums, while a lower mod can save your business thousands of dollars each year. The good news? There are clear steps you can take to improve your score over time.
What Is the Workers Comp Experience Mod?
The experience modification rate is essentially a score calculated by comparing your company’s workers comp claims history to other businesses in your industry.
- A mod of 1.0 = you’re average for your industry.
- Below 1.0 = better than average, leading to lower premiums.
- Above 1.0 = worse than average, meaning higher costs.
Your mod is directly influenced by claims, so risk management and safety practices play the biggest role in keeping costs down.
Tips to Lower Your Experience Mod in Michigan
1. Take Safety Programs Seriously
Prevention is the best strategy. Regular safety audits, ongoing training, and hazard awareness help reduce injuries before they happen. By keeping claims low, you’ll have the single biggest impact on your mod.
2. Build a Strong Return-to-Work Program
When employees get hurt, helping them return to work in some capacity—even light duty—reduces the severity of the claim. This shortens recovery times and minimizes the long-term cost of claims.
3. Improve Your Hiring Process
“Hire your claims” is a saying in the industry for a reason. Properly screening candidates and making sure they’re physically capable of the job lowers the likelihood of workplace injuries down the road.
4. Watch Out for Small Claims
Frequent, small claims may seem harmless, but they add up quickly. Address root causes and make sure repeat issues are resolved.
5. Monitor and Review Claims Regularly
By reviewing claims, you can spot patterns and even challenge inaccurate or inflated claims. Staying proactive helps you stay ahead of potential cost increases.
6. Create a Positive Safety Culture
When employees feel responsible for their own safety and their coworkers’ safety, they’re more likely to follow procedures and report hazards before accidents happen.
7. Work Closely With Your Insurance Agent and Carrier
Many carriers in Michigan provide safety resources, training, and even discounts for implementing risk management programs. Collaborating with your agent ensures you’re taking full advantage of these opportunities.
8. Benchmark Your Mod Annually
Review your mod score each year and compare it to industry standards. This helps you understand where you stand and where you can improve.
Why This Matters for Michigan Businesses
Lowering your experience mod isn’t just about saving money on premiums—it also shows your employees, customers, and partners that safety is a top priority. Over time, businesses with strong safety programs and a healthy workplace culture tend to see lower turnover, higher productivity, and more sustainable growth.
Final Thoughts
Improving your experience mod won’t happen overnight. It takes a combination of prevention, smart hiring, consistent training, and active claim management. But if you commit to these strategies, you can see real improvements—and significant savings—on your Michigan workers comp insurance.
