Additional Information

Experience Modifiers

Also known as the "experience mod,” an experience modifier is a numerical expression of a company's accident and injury record compared with the industry average. A rating of 1.0 means a company has an average safety record, while an experience mod of 0.80 indicates a company has a good safety record that will earn a discount against its premium. An experience mod of 1.20 means a company has experienced more or greater losses than the industry norm, and the company's costs for insurance will be higher. 

The Experience Mod is calculated using three years of data, excluding the most recently completed year.  For example, the 2021 Experience Mod would include data from years 2017, 2018, and 2019.  There are many variables that are considered in the formula, including: 

  • Whether claims are medical-only or involve lost time  
  • If a company’s frequency of claims is higher than average 
  • If a company’s severity of claims is higher than average 
  • The size of a company’s payroll and its class codes 

The formula was developed by the National Council on Compensation Insurance (NCCI), and  factors are recalculated every year based on national data.  In the case of Commonwealth Contractors, a third party promulgates the group’s mods, effective April 1st using the NCCI formula. 

For a detailed explanation, NCCI has published a very helpful document "The ABC's of Experience Rating." 

Regulatory and Informational Resources

The following sources provide information on workers' compensation insurance.