Lost-Time Claim Mod Cost: One Contested Case, $37,500
A Tennessee robbery claim just drew a procedural ruling. The financial lesson for Southeast contractors: one contested lost-time claim can add up to 0.15 to a mod and roughly $37,500 a year.
One contested lost-time claim can add 0.05 to 0.15 to an experience modification rate, the multiplier applied to your workers' comp premium. On $250,000 of manual premium, that swing costs roughly $12,500 to $37,500 a year before carrier pricing (NCCI Experience Rating Plan). Because the mod runs on a three-year window, one disputed claim bills you across three renewals.
An armed robber forced a Walgreens worker in Tennessee to empty an office safe at gunpoint on June 2, 2025. Fourteen months later, the workers' comp claim that followed is still contested, and it just produced a ruling that should make every Southeast construction CFO pull their own open files.
On July 3, 2026, the Tennessee Workers' Compensation Appeals Board ruled that a judge did not violate the worker's due process rights by delaying her expedited benefits hearing until she was medically able to take part (Business Insurance, July 2026). The board noted that state law requires parties to "attend mediation and mediate issues in good faith," and found the judge had delayed the hearing, not denied it. The legal question was procedural. The lost-time claim mod cost sitting behind it is not.
Why one claim outweighs its dollar value
A lost-time claim is one where the worker misses enough days to draw indemnity benefits, not just medical treatment. It hits your experience modification rate (EMR, also called the mod) far harder than a medical-only claim of the same size, because of how the NCCI (National Council on Compensation Insurance) Experience Rating Plan splits losses.
Every claim gets divided at a state-specific split point. Dollars below it are primary losses; dollars above it are excess. Primary losses carry most of the weight in the mod formula. As of 2026, split points range from about $9,500 in Oregon to $38,000 in Louisiana, with most NCCI states between $15,000 and $25,000, set at roughly 40% of each state's average lost-time claim cost (NCCI Experience Rating Plan). The first dollars of a disputed claim land almost entirely in that heavily-weighted primary layer. That is why a single lost-time claim moves the number so much more than its face value suggests.
The three-year tail on a contested claim
A contested claim is worse than a settled one, because it stays open. While litigation runs, the carrier holds a reserve, an estimate of ultimate cost, and that reserve is what your worksheet counts, not what has been paid. A claim fought for a year sits on the books at full reserve the whole time.
And it does not sit there once. The mod runs on a rolling three-year experience window, so a claim from one policy year rides your rating for three straight renewals. Say a contractor carries $250,000 in manual premium and a contested lost-time claim adds 0.10 to the mod. That is $25,000 in added premium this year. Held across the three years the claim sits in the window, the same claim bills roughly $75,000. In our reviews of Southeast contractor worksheets, the claims that hurt most are rarely the catastrophic ones. They are the mid-sized disputed files nobody circled back to.
When rates are rising, the mod is the lever left
Tennessee loss costs are set to climb 4.8% for policies on or after October 1, 2026 (NCCI filing TN-2026-04), driven largely by the state's April 2026 medical fee schedule update. When the filed rate goes up, the mod multiplies a bigger base. A 1.15 mod on a rising loss cost costs more this renewal than it did last, for the exact same claims history.
That is the trap in a hardening market. You cannot argue the state's loss cost down. The mod is the one input on the renewal that reflects your own data, and a contested claim carried at an inflated reserve is the fastest way to hand the carrier a number your file does not actually support.
What an audit would check
An audit checks whether the claims driving your mod match reality. That means confirming a lost-time claim was correctly classified as lost-time and not something lighter, whether the reserve on a contested claim still reflects the likely outcome or has drifted high while the case dragged, and whether the claim values on your NCCI worksheet match the carrier's current records. It also checks that a claim has aged out of the experience window on schedule rather than lingering a year too long. Most contractors we review have at least one of these unaddressed, and most never see it because it hides inside a single line on the worksheet.
A clean worksheet will not make a contested claim disappear. It can make sure that claim only costs you what it actually should. Send us your NCCI worksheet and we'll review it for free.