Everything You Need To Know About Ex Mods

An experience modification rate helps determine your workers comp premium. You should know more about this factor to help you choose the best provider for your company. Here’s everything you need to know about a workers comp ex mod

What’s Workers Comp Ex Mod?

Insurers use ex mods to determine the relationship between past injuries and future risks. In its most basic form, the actual losses are divided by the expected losses, and higher risks mean higher costs. 

How Does the Rating Work?

The data to determine the ex mod rating comes from the insured company’s history, generally after the start date. However, if a company has just started working with a new insurance company, the data will come from a set period before coverage begins. Generally, this data will be collected starting four years nine months and ending one year nine months before coverage begins. 

What Happened To Manual Ratings?

Everyone still receives a manual rating. With this system, insurers group like companies and determine an average loss rating and policy cost. While this is more straightforward, you can save money with an ex mod because it is customized to your situation. 

Ex mods are a crucial part of determining a policy premium regarding workers comp. To understand what affects your workers comp, you must know more about ex mods. Remembering this information will help you choose the best policy for your business. 

Do You Need Workers’ Comp for 1099 Employees?

Workers’ compensation is an essential type of insurance for business owners. It covers medical expenses and lost wages for employees who are hurt on the job. For workers with a W-2 form, it’s cut and dried. They are employees and should be covered by workers’ comp. Then there are independent contractors, also called 1099 employees, after their tax status. Are they actually employees and do they require workers’ comp coverage? That depends on the answers to several questions.

Independent Contractor or Employee?

Workers compensation insurance for 1099 employees is necessary if they meet the criteria to be considered employees. Workers are generally considered employees if they are under the direct control of the employer. This can be determined by the answers to these questions:

  • Can the worker be fired for reasons other than breach of contract? 
  • Is the individual trained or instructed by the employer?
  • Does the employee provide tools, supplies, or other equipment?
  • Does the employer set the hours and determine how the worker performs tasks or does the worker decide how and when they are done?
  • Is the worker free to work for others?

When deciding whether or not a 1099 employee should be covered by workers’ compensation, go through these questions and determine whether or not you have control over the individual, thus making them an employee. If so, they should be covered.