What number should a safety person be the most concerned with for Workers Compensation? I have asked this question often when presenting to Loss Prevention, Safety Engineers and similar positions. The answers that I often hear are:

• Number of accidents
• Lost workdays
• Self-inspection results

Those are all important. When a VP or President of a company asks me what number is the most important in evaluating a Work Comp safety program, I always say the Experience Modification Factor (E-Mod or X-Mod). Why? Because it is the distilled number of what the claims costs are for a certain company. In other words, it is the insurance carrier's notation of how the safety program is performing over a few years, not just one.

Oh, and self-insureds are not immune from the E-Mod. There is a different term for the E-Mod for self-insureds and it is the Loss Development Factor (LDF). The LDF may cover more years than the E-Mod, but it is still the ultimate evaluator of a company's safety program.

I often hear from safety personnel that the insurance is "some other department's problem." Nothing could be further from the truth.

Bottom Line - The LDF or E-Mod/X-Mod is the Workers Comp safety program's effectiveness turned into cash.

Next Up - How long does one bad year of claims cost a company's Workers' Comp program?

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