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Understanding Your Organization’s Experience Modification Rate (EMR)

Tiffany Scuglik

As a company in the construction industry, safety is always number one. One safety measurement used by many construction companies is called Experience Modification Rate (EMR).

What is Experience Modification Rate (EMR)?

EMR is a number used by insurance companies to measure both past costs of injuries and future chances of risk.

It is a numeric representation of a business’s claims history and safety record as compared to other businesses in the same industry, within the same state.  Your EMR states one of three things:

  • This company is riskier than average (EMR>1.0)
  • This company is no more or no less risky than average (EMR=1.0)
  • This company is safer than average (EMR<1.0)

Understanding and lowering your EMR is essential for organizations looking to reduce insurance costs and even gain more bids on work.

How is EMR Calculated?

EMR is calculated by a simple formula:

EMR=Actual Claims/Expected Claims

Data is reported to the National Council on Compensation Insurance, and calculating agencies use claim data from three years ending one year prior.

Then, each claim is analyzed and the EMR is then calculated using different values in different steps in the EMR Worksheet.

In this analysis, things such as the number of incidents, the type of incident, and the amount of money paid out for each incident will be taken into consideration.

How do I Lower EMR?

In order to lower your EMR, it starts with a safety plan, training to ensure employees are safe on the job, and setting safety-related goals.

JP Cullen’s EMR

Our current EMR of 0.49 is less than half the national average, which is quite an accomplishment considering JP Cullen’s labor hours were over 1 million for 2017 and JP Cullen is one of a few construction managers to include high-risk trades in our rating: Ironworkers and Masons. Our rate is one of the lowest rates amongst General Contractors & Construction Managers in the marketplace.



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May 16, 2024