A 1.00 Mod Doesn't Tell You If a Sub Can Stop a Fall

When a general contractor qualifies subcontractors before letting work, the experience modification rate check is standard. A sub presents a certificate with a 1.00 mod. The box is checked.

For small specialty trade subs, that 1.00 may not mean what the GC assumes.

What a default 1.00 mod means for small subs

NCCI calculates an experience modification rate when an employer meets certain minimum eligibility thresholds. The specific requirements vary by state, but the general rule is that an employer must have an annual WC premium above a certain level, typically in the range of $5,000 to $10,000, for at least two of the past four years to generate an experience rating.

Small specialty trade contractors, framing subs, roofing subs, masonry subs with fewer than 10 employees and seasonal or project-based work patterns, often don't meet this threshold. Their WC premium for a given policy year may be $4,000, or they may go uncovered in off-season months, or they may have only one or two years of history. NCCI doesn't calculate a mod for them. Their modifier is listed as 1.00 on the certificate.

That 1.00 is a placeholder. It reflects not enough data to calculate, not three years of claims-free operation.

Where small subs generate fatal falls

NIOSH data shows that 70% of fatal falls in construction occur at firms with 10 or fewer employees (NIOSH, 2022). The concentration is not accidental. Small firms have fewer resources for dedicated safety personnel, less institutional knowledge of fall protection requirements, and higher workforce turnover. Workers on their third week at a new sub don't have the accumulated hazard awareness that longer-tenured crews develop.

BLS fatality data shows that specialty trade contractors, including roofing, framing, masonry, and electrical, account for the majority of fatal falls in construction. Most specialty trade work is performed by smaller firms. The fatality concentration at small firms is specifically the category where experience rating thresholds mean the mod tells you nothing.

The 1.00 mod on a four-person roofing sub's certificate reflects a firm with insufficient experience rating history. It says nothing about whether that firm has had injuries, whether those injuries were reported, or whether that firm operates with fall protection that would pass an OSHA inspection.

The GC's exposure when a small unrated sub has a fatality

When a small sub's worker sustains a fatal fall injury on a GC's project, several things happen simultaneously. The sub's WC carrier responds to the death benefit and indemnity claims for the surviving dependents. If the sub is a sole proprietor who opted out of WC coverage (permissible in many Southeast states), or if the sub's payroll reporting was understated, the claim exposure can flow to the GC's policy through the statutory employer pathway.

Fatal WC claims carry costs that are categorically larger than non-fatal injuries. Death benefits include dependents' benefits, which continue for years or decades. Medical costs at the time of fatal injury are acute. The total WC cost of a construction fatality can reach $500,000 to $750,000 depending on survivor benefit structure, age of dependents, and state statute.

In the NCCI experience rating formula, a $600,000 fatality claim against a GC's policy carries $17,500 in primary losses (primary cap) and $582,500 in excess losses. Excess losses are weighted down by the D ratio, but they still contribute meaningfully to the mod calculation. On a mid-size GC's account, one fatal sub-employee claim can produce a mod increase of 0.10 to 0.15 points and hold that increase for three years.

Why the mod check doesn't substitute for field verification

A sub with a genuine 1.00 earned mod, meaning three years of experience-rated premiums with no significant losses, has demonstrated safe performance over a credible sample period. That is a meaningful signal.

A sub with a default 1.00 because their premium is below the eligibility threshold has demonstrated only that they've been small enough to avoid the experience rating system. Their claim history, if any, has been absorbed into industry-wide rate calculations but has never been isolated as an individual modifier.

In our reviews of Southeast contractor worksheets, fatality claims from sub-employee situations stand out because the class code, injury type, and project location don't always match the GC's core operations. A roofing fatality on the worksheet of a GC whose primary business is commercial interiors arrived through a sub relationship. The sub's 1.00 mod certificate said nothing about what was going to happen on that roof.

What an audit would check

An audit examines whether claims in the experience period associated with fatal or catastrophic injuries trace to the GC's own workforce or to sub-employee situations. A fatal fall claim that reached the GC's policy through the statutory employer pathway may carry a reserve reflecting worst-case dependent benefit projections. If the actual dependent benefit structure produces a lower final cost, the reserve overstatement inflates actual losses on the worksheet until the claim is resolved. The audit also looks at whether any workers' compensation settlement has closed the claim at a figure below the current reserve, creating favorable development that reduces actual losses and may improve the mod on recalculation.

If your experience window contains fatal injury claims, send us your NCCI worksheet and we'll review the reserve status and attribution before your next renewal.