What Is a Good EMR Rating? Average, Good, and the Floor

Ask ten contractors what a good EMR rating is and nine will say 1.00. That answer is wrong in a useful way. A 1.00 mod doesn't mean your safety record is good. It means your claims experience is exactly average for employers of your size and classification. Average is the starting line, not the finish.

The experience modification rate works as a multiplier on your workers' comp premium. At 1.00 you pay the filed rate. At 1.15 you pay 15% more. At 0.85 you pay 15% less. So the honest version of the question isn't "is my mod good?" It's "how far below average can my mod actually go, and is the number I'm carrying real?"

The scale, in plain terms

Below 1.00, you're outperforming the average employer in your class and size band, and the formula pays you a credit for it. Above 1.00, you're underperforming and paying a debit. The distance from 1.00 is what matters. A drop from 1.20 to 1.05 on a $200,000 base premium is worth $30,000 a year. The same premium at 0.80 versus 1.00 is a $40,000 swing.

Most established contractors land within a band around the average rather than at the extremes. Very low mods in the 0.60s and 0.70s tend to belong to larger employers with strong claim histories, and that's not an accident of effort. It's arithmetic.

Why your size decides what good looks like

The formula doesn't treat a $1 million payroll and a $20 million payroll the same. Smaller employers get more statistical stabilization, which pulls their mods toward 1.00 from both directions. One bad claim won't send a small contractor to 2.00, but a spotless record won't carry them to 0.60 either.

Every employer has a minimum mod, the lowest number the formula can produce with zero claims in the experience period. For many small contractors that floor sits in the 0.80s or low 0.90s. If your minimum mod is 0.87 and you're carrying a 0.91, you're nearly perfect. If your minimum is 0.62 and you're carrying a 0.91, there's a lot of expensive daylight between where you are and where your size says you could be. Same 0.91. Two very different report cards.

That's why comparing mods across companies is mostly noise. The useful comparison is your mod against your own floor.

The 1.00 cliff on bid day

There's a second definition of good that has nothing to do with premium. Many general contractors, project owners, and public agencies set EMR bid requirements at 1.00 or lower, and some programs cut off contractors above 1.20. On those jobs your mod isn't a pricing input. It's a pass-fail gate. A 1.01 doesn't cost you 1% more premium; it can cost you the whole contract.

For contractors chasing that work, good means under the gate with room to spare, because the mod resets every year and a single lost-time claim can push a 0.97 over the line at the next rating date.

A good-looking mod can still be wrong

Here's the part the benchmarks miss. The mod is a calculation on carrier-reported data, and that data goes unaudited unless someone reviews the worksheet. A contractor at 0.94 with a stale reserve or a misassigned class code might belong at 0.86. The number looks fine, wins bids, and still overcharges them every policy year. In our reviews of Southeast contractor worksheets, flattering mods hide errors almost as often as ugly ones do.

So treat good as two separate tests. Is the number competitive for your size and your market? And is the number accurate? You can estimate what your mod is costing you against a 1.00 baseline, but only the worksheet says whether the inputs are real.

What an audit would check

An audit checks the distance between your current mod and your minimum mod, then checks whether the data creating that gap is correct: claim values reconciled against carrier loss runs, classifications matched to the work actually performed, and credits applied where they belong. A mod can be good, accurate, or both, and only the worksheet tells you which. Send us your NCCI worksheet and we'll review it for free.