What You Need to Know About EMRs
A company’s EMR has a weighty impact on their business. The Experience Modification Rate is used primarily by insurance companies to gauge the cost of past injuries and future risk level. The goal is to have the lowest possible EMR because that relates to the costs of workers comp insurance premiums. However, if you’re considering doing business with a particular crane service company, you probably care less about what they pay for insurance and more about what it means for you and your project. It helps to have an understanding of what goes into calculating an EMR and why.
Components of the EMR
When an insurance company is calculating EMR, the base premium is the company’s payroll in a given job classification divided by 100. That number is then divided by a ‘class rate’ determined by the NCCI (National Council on Compensation Insurance). A comparison is then made of past claims to those of similar companies. With crane service companies, the risk is generally higher than it would be with other industries, which is why it’s so important to evaluate a company’s EMR before contracting business.
The NCCI uses a complicated formula that considers the ratio between expected losses in your industry and what the company has incurred as well as frequency and severity of any losses. The result of the final formula is the company’s EMR.
Why EMR Matters for Crane Service
Many owners or CMs will use EMR as a way of determining which contractors will be allowed to set foot on their job site. This is smart! Unfortunately, far too many contractors don’t have an understanding of what it means and how their own decisions can impact it.
Generally, a high EMR can mean that a company is sloppy or doesn’t take necessary precautions on job sites – hence the higher number of incidents. Crane service is a niche that cannot afford incidents, as every task involves precision and high safety standards. Generally, an EMR above 1 means that the specific company has had more injury claims reported than would be expected in the industry. This is a huge red flag, especially with companies who provide crane service. An EMR below 1, on the other hand, generally means that a company does a good job of maintaining safety standards. A low EMR is the sign of a well managed company with well-trained employees.
At Alliance Riggers and Constructors, safety is the number one priority. We pride ourselves in our EMR of 0.70. We know that the crane service industry requires the absolute highest level of training and safety protocol. Contact us today for an estimate and to learn how our excellent safety standards can benefit your project.