Combinability
Combinability is the set of rules that decide whether a prior company's experience modification rate follows into a new or restructured entity after a sale, merger, or ownership change. Handled correctly, combinability rules mean an entity with a clean claims history doesn't inherit someone else's bad record, and an entity trying to escape a bad record by restructuring generally can't. Handled incorrectly, which happens more often than most contractors expect, especially in smaller transactions where nobody involved specializes in rating rules, either the wrong history gets carried forward into your current EMR (experience modification rate), or a history that should have transferred doesn't. NCCI's ERM-14 form is the standard document used to report an ownership change and apply the combinability rules correctly. If your company has changed ownership structure at any point in recent years, whether that's a sale, a merger, or adding or removing a partner, it's worth specifically checking that your worksheet reflects the correct combined or separate history, even if nothing else about your claims looks unusual.
Common questions
Can a bad mod be avoided by starting a new company?
Generally no. Combinability rules exist specifically so an entity trying to escape a bad claims history by restructuring still carries it forward.
See also
Source
Is your mod right?
Most contractors have never had the worksheet compared to the loss runs and payroll behind it. See what your mod is costing you, or get on the list for a full verification.