Personal Lines
Coverage Basics
How an Experience Modification Rating (E-Mod) Affects Your Workers' Comp Premium
Aaron Ameduri
Last reviewed: September 22, 2026
Your experience modification rating, or e-mod, is a multiplier applied to your base workers' comp premium based on your claims history compared to other businesses in your industry. A rating of 1.0 is average; below 1.0 lowers your premium, above 1.0 raises it. It's recalculated annually based on a rolling history of claims.
How it's actually calculated
Your e-mod compares your actual claims history against the expected claims for a business your size and industry, using a formula set by your state's rating bureau. It typically looks at a three-year window, excluding the most recent year, so a bad claim year shows up in your rating for a while after it happens.
What moves it
- Frequency of claims matters more than severity in most formulas, several small claims can hurt your e-mod more than one large one
- Payroll and industry classification set your expected loss baseline
- Claims that stay open longer keep affecting your rating longer
Why it matters beyond premium
A high e-mod can disqualify you from bidding on certain contracts, many GCs and public projects set a maximum e-mod for subcontractors. It's not just a cost issue, it can be a can't-bid-the-job issue.
Common questions
Can I lower my e-mod once it's high? Yes, over time, through better safety practices and getting claims closed. It's a rolling calculation, so it improves as bad years age out.
Is my e-mod the same across every state I work in? No, some states use different rating formulas. Worth checking if you operate in more than one.
Send me your current e-mod and payroll and I'll tell you what's actually driving it.
— Aaron