What is an EMR? The contractor's experience modification rate, explained

Updated September 12, 2026

If you’ve been told “you need to be under 1.0 to bid,” this is the number they’re talking about.

The short version

Your EMR — experience modification rate, also called your experience mod, x-mod, or just “mod” — is a multiplier applied to your workers’ compensation premium. A 1.00 means your claims history looks average for contractors doing your kind of work. A 1.15 means it looks worse than average and you pay 15% more. A 0.85 means better, and you pay 15% less.

(One thing to clear up, since it trips up search engines: “EMR” here has nothing to do with electronic medical records. It’s an insurance rating term.)

Where the number comes from

The rating bureau in your state — NCCI in most states, a state bureau in a few — calculates your mod once a year. It uses:

• Your payroll by class code for three policy years. Not the most recent year: the rating window skips the year that just ended and uses the three before it, because carriers need time to report.
• Your claims from those same three years, valued as of a reporting date. Each claim is split into a “primary” portion (the first slice, which counts fully) and an “excess” portion (the rest, which counts less). This is why claim frequency hurts more than one large claim.
• Expected losses for your class codes and payroll — what a contractor your size, doing your work, would normally have.

Roughly, the mod compares your actual losses to your expected losses, with some weighting so a small contractor isn’t whipsawed by a single bad year. Above 1.0, your losses came in higher than expected. Below, lower.

Why 1.0 is the line

Many general contractors, owners, and public agencies use an EMR below 1.0 as a prequalification requirement. It’s a blunt instrument, but it’s simple, it’s on a single document, and it’s hard to argue with. If you’re at 1.04, you don’t get to explain that it was one claim three years ago. You’re not on the list.

Why it lasts three years

Because the rating window is three years, a claim affects your mod for three consecutive annual ratings. A claim that happened in 2024 is in your 2026, 2027, and 2028 mods. That’s also why a claim that’s still open on the reporting date matters so much: it’s counted at its reserved value, and if the reserve is high, that inflated number sits in your rating until the claim closes and the next reporting date catches it.

What can be wrong with it

Every input above is a number someone typed. The common problems:

• Payroll reported to the bureau doesn’t match what you actually paid, or is in the wrong class code.
• Class codes on the worksheet don’t match your operations, so you’re measured against the wrong expected losses.
• Claims that belong to someone else, are valued at a stale number, should have been closed, or qualify for a cap or a reduction they never received.
• Ownership changes handled wrong, so another entity’s history is carried into yours — or yours isn’t being carried when it should be.
• Timing: a claim that settled after the reporting date still showing at its old reserve.

None of these fix themselves. The bureau calculates from what the carrier reports; the carrier reports from what’s in its system. If nobody compares the worksheet to the source documents, nobody knows.

What to do

Get your current experience rating worksheet from your agent or carrier. Get your loss runs for the three years in the rating window. Compare every line. If you’d rather have someone who does this all day do it, that’s what we’re here for — and we’ll tell you exactly what to send your agent to fix what we find.