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Do You Know How Old Your Tires Really Are? (Jan/Feb-18)
Risk Assessment & Premise Liability Insurance (Nov/Dec-17)
Forklift Safety – You Can Save A Life Today (Sep/Oct-17)
Protect Your Employees from Heat Stress Related Injuries (Jul/Aug-17)
Lockout-Tagout from a Manager’s Perspective (May/Jun-17)
Do Your Employees Really Know How to Use Personal Protective Equipment? (Mar/Apr-17)
OSHA & Lockout/Tagout (Nov/Dec-16)
OSHA Increases Their Penalties Towards Employers (Jul/Aug-16)
Do You Know What Your Experience Modification Rate Is? (May/Jun-16)
Machine Safety (Sep/Oct-15)
Lockout, Tagout & Tryout – Are You in Compliance? (Jul/Aug-15)
Forklift Safety Practices (May/Jun-15)
Using the Right Power Saw to Cut Plastic Materials (Mar/Apr-15)
OSHA & Machine Safeguarding (Jan/Feb-15)
Ergonomics (Sep/Oct-14)
Respiratory Protection . . . Does Your Program Protect? (May/Jun-14)
First Aid Program (Mar/Apr-14)
Working with Composite Materials Safely and Preventing Dermatitis (Jan/Feb-14)
Preventing Winter Slips, Trips and Falls (Nov/Dec-13)
The Globally Harmonized System for Hazard Communication – Are You Ready For It? (Sep/Oct-13)
Safety & New Employee Orientation (Jul/Aug-13)
Liquefied Petroleum Gas Safety (May/Jun-13)
Posting of OSHA Notices (Jan/Feb-13)
Staying Safe This Winter (Nov/Dec-12)
Personal Protection - Storage, Maintenance and Care (Sep/Oct-12)
Machine Safeguarding (Jul/Aug-12)
Is Your Lockout & Tagout Program Working? (May/Jun-12)
Getting Familiar with OSHA (Mar/Apr-12)
Is Your Piping Systems Properly Marked? (Jan/Feb-12)
Accident Prevention, Does Your Company Have An Effective Program? (Nov/Dec-11)
Defining FR – Flame Resistant Fabrics (Jul/Aug-11)
OSHA's Flammable & Combustible Liquids (May/Jun-11)
Safety & Health Program Check-up (Jan/Feb-11)
OSHA Is My Friend (Nov/Dec-10)
OSHA Standard for Control of Hazardous Energy Sources? (Sep/Oct-10)
Lockout/Tagout Program (Jul/Aug-10)
Safe Handling of Compressed Gas Cylinders (May/Jun-10)
What You Should Know about OSHA and Plastic Working Machinery (Mar/Apr-10)
Fasten Those Forklift Seat Belts (Jan/Feb-10)
My Back Hurts (Nov/Dec-09)
Fall Protection Program (Sep/Oct-09)
Accident Prevention & Investigation (Jul/Aug-09)
OSHA & Machine Safeguarding (May/Jun-09)
Carbon Monoxide Hazards (Mar/Apr-09)
OSHA Electrical Safety and Training (Jan/Feb-09)
Free Forklift ANSI Standards (Nov/Dec-08)
Worksite Fire Emergencies (Sep/Oct-08)
Machine Safety (Jul/Aug-08)
Ladder Safety (May/Jun-08)
Is Your Company on OSHA's Hit List?
OSHA Notifies Workplaces with High Injury and Illness Rates (Mar/Apr-08)
Safety Means . . . Never Having to Say You're Sorry (Jan/Feb-08)
Flammables and Combustible Liquids (Nov/Dec-07)
Designing-In Safety NOT Retrofitting Safety (Sep/Oct-07)
Back Safety and Lifting (Jul/Aug-07)
Machine Guarding (May/Jun-07)
Your Hearing Keep it for a Lifetime (Mar/Apr-07)
Light Up the Holidays the Safe Way (Nov/Dec-06)
Would You Risk Your Employee's Life? (Sep/Oct-06)
How to Control Workers' Compensation Costs (Jul/Aug-06)
Compliance with 70E Electrical Standards (May/Jun-06)
OSHA Is on the Move (Mar/Apr-06)
Workplace Violence (Jan/Feb-06)
The Aging Workforce (Nov/Dec-05)
The Safety Paradox (Sep/Oct-05)
Machine Guarding (Jul/Aug-05)
Effective Risk Management (May/Jun-05)
Safety Is Everyone's Business (Mar/Apr-05)
New Year's Resolution Safety (Jan/Feb-05)
Safe Driving (Nov/Dec-04)
Terror In The Skies Revisited (Sep/Oct-04)
How They Got Hurt (Jul/Aug-04)
In-Plant Air Monitoring & Analysis (May/Jun-04)
Safety on the Job and Complying with the Americans With Disabilities Act (Mar/Apr-04)
Link to Article Archive (Jan/Feb-04)
A Supervisor's Duty (Nov/Dec-03)
Machine Safety – Are Your Machines Safe to Operate? (Sep/Oct-03)
Summer is Here (Jul/Aug-03)
Working Safely On Powered Industrial Trucks (Forklifts) (May/Jun-03)
Does Your Safety and Health Workplace Program Contain All of These Elements? (Mar/Apr-03)
Methylene Chloride (Jan/Feb-03)
Safety Signs & Labels - Does Your Facility Comply? (Nov/Dec-02)
Indoor Air Quality (Sep/Oct-02)
When OSHA Arrives (Jul/Aug-02)
Facts About the Occupation Safety & Health Administration (OSHA) (May/Jun-02)
Workplace Fire Safety (Mar/Apr-02)
OSHA 300 Form (Jan/Feb-02)
Preparing for Disaster (Nov/Dec-01)
How Much is a Life Worth? (Sep/Oct-01)
Material Handling Programs (Jul/Aug-01)
It's Up To You To Protect Your Skin (May/Jun-01)
When You’ve Been Handed the Responsibility for Safety (Mar/Apr-01)
A Fresh Look at Machine Safeguarding (Jan/Feb-01)
Safe Work Habits (Nov/Dec-00)
The Importance of Material Safety Data Sheets (Sep/Oct-00)
Hazardous Waste Operations and Emergency Response (Jul/Aug-00)
Lockout/Tagout Program (May/Jun-00)
OSHA Violations, Citations and Penalties for 1998 (Mar/Apr-00)
Erogonomics and Machinery Safeguarding (Jan/Feb-00)
General Machine Principles (Nov/Dec-99)
SAFETY SOLUTIONS
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SAFETY SOLUTIONS: Do You Know What Your Experience Modification Rate Is?

Three attorneys have contacted me in the past month to potentially represent their clients. Two of these cases were potential wrongful deaths and one was a machine guarding amputation case.

The machine guarding amputation case involved a military veteran who after serving our great nation for three tours in Afghanistan returned back home to attend a technical college course to learn a new trade and then while operating a metal shear (that was not properly guarded) amputated two of his fingers. In each case before I agreed to represent them as an expert witness, I asked the attorneys what their clients Standard Industrial Classification Code (SIC) was and what their Experience Modification Rate (EMR) was and all I heard on the other end of the phone was silence. As an owner or manager, do you know what your SIC and EMR is?

Manufacturers of plastic products usually are in Standard Industrial Classification (SIC) Codes 3083 and their NAICS code is 32613. So to see how my company compares to my competitors company, I need to know all of this information. Experience Modification Rate (EMR) has strong impact upon a business. It is a number used by insurance companies to gauge both past cost of injuries and future chances of risk. The lower the EMR of your business, the lower your worker compensation insurance premiums will be. An EMR of 1.0 is considered the industry average.

If your business has an EMR greater than 1.0 the reasons are simple. There has been a worker compensation claim that your insurance provider has paid. To mitigate the insurance company’s risk, they raise your worker compensation premiums. The bad news is this increased EMR sticks with you for 3 years.

How Experience Modification Rates are calculated

The base premium is calculated by dividing a company’s payroll in a given job classification by 100, and then by a ‘class rate’ determined by the National Council on Compensation Insurance (NCCI) that reflects the inherent risk in that job classification. For example, a machine operator has an inherently higher risk of injury than a receptionist, so their class rate is significantly higher.

A comparison is made of past claims history to those of similar companies in your industry. If you’ve had a higherthan- normal rate of injuries in the past, it is reasonable to assume that your rate will continue to be higher in the future. A higher insurance rate means less money for you and your company. Insurers examine your history for the three full years ending one year before your current policy expires. For example, if you’re getting a quote for coverage that expires on January 5, 2016, the retro plan will look at 2015, 2014 and 2013.

NCCI has developed a complicated formula that considers the ratio between expected losses in your industry and what your company actually incurred, as well as both the frequency of losses and the severity of those losses. A company with one big loss is going to be ‘penalized’ less severely than a company with many smaller losses, because having many small losses is seen as a sign that you’ll face larger ones in the future.

The result of that formula is your EMR, which is then multiplied against the manual premium rate to determine your actual premium (before any special discounts or credits from your insurer). Essentially, if your EMR is higher than 1.00, your premium will be higher than average; if it’s 0.99 or lower, your premium will be less.

How does a high EMR affect costs? In Business, if it’s under 1.00 – no one really pays attention to it. If it’s over 1.00 –it is now a hot topic: “How did it get to over 1.00?” “What’s wrong with our safety program?” “How could this happen to us –I thought we had a pretty good safety program – our incident rates are below BLS averages for our industry?”

An EMR of 1.2 would mean that insurance premiums could be as high as 20% more than a company with an EMR of 1.0. That 20% difference must be passed on to clients in the form of increased bids for work. A company with a lower EMR has a competitive advantage because they pay less for insurance.

How do you lower EMR?

The good news is that EMR can be lowered. An effective safety program that eliminates hazards and prevents injuries is the starting point. No injuries equal no claims.

In the real world injuries will happen, but the response can help keep EMR from increasing as much as it could without proper management. Having a plan to manage injuries and workers compensation claims is a must to get control of the EMR.

Modification Rates and reduce your overall costs. Reducing EMR gives you an edge over your competition when bidding out work and save money. Plastic manufactures and owners are realizing the benefits of low EMR numbers and often prequalify companies before they even look at bids. It would be unfortunate to lose business and money because of high EMR.

For more information, click on the author biography at the top of the page.

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