Key Takeaways
- What is a good EMR rating? Anything below 1.00. An experience modification rating of 1.00 is average; below it lowers your workers’ compensation insurance premiums and above it raises them.
- Plant owners check a construction company’s EMR ratings during contractor prequalification, usually alongside your Total Recordable Incident Rate (TRIR).
- In Texas and most states, NCCI calculates EMR rates. A few states use their own state rating bureaus, and the four monopolistic states run their own programs.
- Claim frequency counts more than claim severity: ten $5,000 lost-time claims hurt more than one $50,000 claim.
- Each experience modifier uses a three-year experience period of claims history, so improvements show up about two years later and last three years.
- Lower EMR rates come from fewer injuries, injury triage, return-to-work programs, and reserve auditing. Discouraging injury reporting is illegal and backfires.
What Is a Good EMR Rating?
If you run a construction company or specialty contractor that works inside Houston refineries, chemical plants, or midstream sites, your EMR rating is one of the first numbers a client checks. It can decide whether you’re allowed to bid at all. So what is a good EMR rating, and what can you do if yours is too high?
Anything below 1.00 is good, 1.00 is average, and above 1.00 is a problem. According to NCCI, an experience modifier is either unity (1.00), a credit (below 1.00), or a debit (above 1.00). A 0.85 means your workers’ compensation claims have run 15% better than expected; a 1.20 means 20% worse. The EMR rating is applied to your manual premium, so it changes what insurance companies charge you:
| EMR rating | What it means | Effect on a $100,000 manual premium |
| 0.80 | Credit: claims well below expected | About $80,000 |
| 1.00 | Average: claims in line with expected | $100,000 |
| 1.25 | Debit: claims above expected | About $125,000 |
Illustrative only. Schedule credits and other rating factors also affect your final workers’ compensation policy premium and the insurance quotes you get.
What Is an Experience Modification Rate (EMR)?
An Experience Modification Rate, also called an Experience Modification Rating, e-mod, or MOD rating, compares your workers’ compensation claims with those expected for a company of your size doing the same work. It works like a credit rating system for your safety record: one number that insurance companies use for insurance quotes and that owners and general contractors compare across the construction industry.
Who calculates EMR rates?
In Texas and most states, the National Council on Compensation Insurance (NCCI) calculates EMR rates; Texas adopted NCCI’s plan on July 1, 2015. A few states use their own state rating bureaus, such as California’s Workers’ Compensation Insurance Rating Bureau.
EMR ratings in monopolistic states
In the four monopolistic states, North Dakota, Ohio, Washington, and Wyoming, employers must buy workers’ compensation insurance from a state fund, and private insurers can’t sell it there (The Hartford). Those funds, such as Ohio BWC and Washington L&I, run their own experience rating programs, so an experience modification rating earned in Texas doesn’t carry over automatically. A monopolistic state’s workers’ compensation policy also leaves out employer’s liability, which you cover with stop gap endorsements on your general liability insurance (your GL policy).
If your crews follow work to monopolistic states, like North Dakota’s oil fields or a job under Ohio BWC coverage, talk to your agent before the construction project starts. Stop gap endorsements have to be added to your GL policy before the work starts, so ask early. Owners in monopolistic states may ask to see stop gap endorsements on your certificates of insurance, and missing insurance coverage can hold up mobilization.
Why Plant Owners Screen EMR Ratings
Many Houston-area owners prequalify contractors through ISNetworld, Avetta, Veriforce, or their own questionnaires. They collect your recent EMR ratings (often three years), certificates of insurance (usually ACORD certificates), hold harmless agreements, your TRIR and other OSHA-recordable injuries data, and your written workplace safety programs. The hiring client sets the pass or fail threshold.
A 1.00 cutoff is common, whether you’re in vertical construction or horizontal construction. Some owners set a lower minimum EMR rate for high-hazard work, and some accept higher EMR rates with an explanation letter and corrective action plan. Owners care because EMR ratings come from insurance claims data, not self-reported numbers, so they signal your risk level and, to some owners, your financial stability. Some also compare your TRIR with the industry rates published by the Bureau of Labor Statistics to see whether you meet construction industry standards.
If you’re a Texas non-subscriber, you have no workers’ compensation policy and therefore no EMR rating. Ask each client what they accept instead, usually your injury rates, claims history, and evidence of your safety program.
How EMR Calculation Works
Per NCCI’s ABCs of Experience Rating: Experience modification rate (EMR) = adjusted actual losses ÷ adjusted expected losses. Expected losses come from your payroll in each classification code multiplied by that class’s expected loss rate. Actual loss figures come from the workers’ compensation claims on your policies.
| Step | Simplified example |
| Expected losses (payroll × expected loss rate) | $100,000 |
| Adjusted actual losses (from your claims) | $85,000 |
| Experience modifier | $85,000 ÷ $100,000 = 0.85 |
| Manual premium (payroll × class rates) | $200,000 |
| Manual premium × EMR rating | $200,000 × 0.85 = $170,000 |
Simplified. NCCI’s full formula also weights excess losses and adds stabilizing values, so your worksheet shows more lines.
The experience period
The experience period covers about three years of payroll and claims history: policies that started 21 to 57 months before your EMR rating’s effective date. Your current policy is never included, so EMR rates describe your safety record from one to four years ago.
Primary losses and excess losses
Each claim is split at a dollar amount called the split point. Primary losses (up to the split point) measure claim frequency and count in full. Excess losses (above it) measure claim severity and are weighted down so one bad claim can’t swing your experience modification rating too far. The Texas split point dropped from $18,500 to $16,500 for EMR ratings effective on or after July 1, 2024, and under NCCI’s current plan it is state-specific and indexed each year with the Texas loss cost filing. Your Experience Rating Worksheet shows the value used for your rating.
Medical-only claims count at 30%
A medical-only claim pays for treatment but no lost wages. NCCI counts only 30% of it, so a $10,000 medical-only claim counts toward your EMR rating as $3,000. The same injury with lost time counts in full.
Why Claim Frequency Hurts More Than Claim Severity
NCCI’s reasoning is that whether an accident happens predicts future claim costs better than how much any one accident costs. So the formula weighs claims frequency over claims severity. Two contractors with the same total losses, using the $16,500 Texas split point that took effect in July 2024:
| Contractor A: one $50,000 claim | Contractor B: ten $5,000 claims | |
| Total incurred losses | $50,000 | $50,000 |
| Primary losses (full weight) | $16,500 | $50,000 |
| Excess losses (reduced weight) | $33,500 | $0 |
Illustrative. All claims assumed lost-time.
Contractor B’s experience modifier takes the bigger hit, because all of its losses are primary losses, with no excess losses to weight down. The small safety incidents crews shrug off are what drive EMR rates up across the construction industry, the same pattern we covered in the true cost of a workplace injury.
How to Lower Your EMR Rating: Seven Safety Strategies
These safety strategies strengthen your workplace safety programs by reducing how often people get hurt, which is what the formula rewards. Our safety consultants can run safety audits of your safety practices against this list.
1. Find the injuries you have most often. Pull three years of OSHA 300 logs and carrier loss runs and rank safety incidents by count, not cost, from hand lacerations to strains to carpal tunnel syndrome. If you’re unsure your logs are complete, see our guide to OSHA recordkeeping requirements.
2. Run jobsite hazard assessments. Do hazard identification on each high-frequency task before work starts. Control workplace hazards in order: eliminate or engineer them out, then safety protocols, then personal protective equipment. Use toolbox talks to walk crews through the plan.
3. Train to the task and document it. Match safety training programs to the work crews actually do, reinforce them in toolbox talks, and keep safety documentation showing who was trained, on what, and when. An OSHA inspector will ask for the same records. Our online safety training catalog covers common plant and construction tasks.
4. Make incident reporting safe. Under 29 CFR 1904.35(b)(1)(iv), your injury reporting procedure must not discourage employees from reporting, and Texas Labor Code Chapter 451 prohibits retaliating against an employee for filing a workers’ compensation claim in good faith. A safety culture where people raise safety concerns, workplace hazards, and near misses catches problems while they’re cheap.
5. Track leading safety metrics. Hold supervisors to safety inspections, hazard observations, safety violations corrected, and how fast corrective actions close. Safety management software helps, but a spreadsheet works. Sharing the numbers each week builds a safety culture crews buy into.
6. Control new-hire and subcontractor exposure. Orient new workers before they start, pair them with experienced crew members, and prequalify your own subcontractors the way owners prequalify you. See what Houston general contractors are liable for.
7. Audit your Experience Modification Worksheet every year. When your EMR worksheet arrives, check classification codes, payroll by class, the expected loss rate for each class, claims that belong to another employer, and closed claims that still carry reserves. Reserve auditing catches these errors, and fixing them is the main way to improve EMR rates without waiting for new policy years.
Return-to-Work Programs, Injury Triage, and Reserve Auditing
What you do in the first days after an injury decides how big the claim gets and how much lands in your experience modification rate.
- Injury triage. Use a clear injury triage process, a trained responder on site or a nurse triage line, so minor injuries get the right care fast. Good injury triage helps keep a claim medical-only, which counts at 30%.
- Report fast. In Texas, covered employers must file DWC Form-001 with their insurance carrier within eight days after an employee is unable to work for more than one day (TDI). Earlier is better, because late reporting tends to drive claim costs up.
- Return-to-work programs. Light-duty tasks approved by the treating doctor get people back sooner and limit lost-wage payments.
- Reserve auditing. Claim reserves on open claims count in your EMR calculation until the claim closes. Review them with your carrier well before your next EMR rating is calculated, and send anything that could close a claim or support a third-party recovery.
How Long It Takes for EMR Rates to Improve
Because of the experience period, each policy year counts in three annual EMR ratings, starting about two years after it begins. For a policy that renews every July 1:
| Experience modifier effective | Policy years used |
| July 1, 2027 | 2023–24, 2024–25, 2025–26 |
| July 1, 2028 | 2024–25, 2025–26, 2026–27 |
| July 1, 2029 | 2025–26, 2026–27, 2027–28 |
A bad year follows you into bids for three years, and changes you make now won’t show until about 2028. Meanwhile, show clients your trend from your logs or safety management software: falling TRIR, leading safety metrics, and closed corrective actions.
Frequently Asked Questions
What is a good EMR rating?
A good EMR rating is anything below 1.00. A 1.00 experience modification rate means your workers’ compensation claims match what’s expected for a company of your size and type. Below 1.00 lowers your workers’ compensation insurance premiums, and above 1.00 raises them.
What is the minimum EMR rate plant owners accept?
It depends on the owner. A 1.00 cutoff is common, some owners set a lower minimum EMR rate for high-hazard work, and some accept higher EMR rates with an explanation letter and a corrective action plan.
How is an EMR rating calculated?
Your experience modifier is your adjusted actual losses divided by your adjusted expected losses. In Texas and most states, NCCI runs the EMR calculation using about three years of payroll and claims history, not counting your current policy.
Do medical-only claims affect EMR rates?
Yes, but NCCI counts only 30% of a medical-only claim, so an injury that never turns into lost time does far less damage to your EMR rating.
Is EMR the same as TRIR?
No. Your EMR rating comes from workers’ compensation insurance claims. Your Total Recordable Incident Rate comes from the OSHA-recordable injuries on your OSHA 300 log. Prequalification platforms usually ask for both.
How can a construction company lower its EMR rating?
Cut incident frequency with hazard assessments and toolbox talks, use injury triage and return-to-work programs, and do reserve auditing on open claims every year. Claim frequency moves EMR rates more than claim severity, so small injuries matter most.
Where Aggie Safety Fits In
Aggie Safety helps Houston contractors find what’s driving their experience modification rating and fix it. We run safety audits, review your OSHA 300 logs and loss runs, and build the safety management program behind your workplace safety programs: hazard assessments, safety training, safety documentation, reporting, and return-to-work. We also help you build a safety culture that keeps EMR rates down, and write the explanation letter a client asks for when your EMR rating is above their cutoff. For broader safety management and risk management support, see our OSHA compliance services in Houston.
Related reading: The True Cost of a Workplace Injury, OSHA Recordkeeping Requirements for Houston Employers, and Subcontractor Safety Compliance: What Houston General Contractors Are Liable For.
Call (713) 613-2830 or request a free safety program review to find out what’s driving your EMR rating and what it will take to bring it under 1.00.
