“What is Your Company’s EMR? – Experience Modification Rate?” #WorkersCompensation

What Is an EMR Rate?

Experience Modification Rate (EMR) has a strong impact on your business. It is a number used by insurance companies to gauge both past cost of injuries and future chances of risk. The lower the EMR of your business, the lower your worker compensation insurance premiums will be. An EMR of 1.0 is considered the industry average.

If your business has an EMR greater than 1.0 the reasons are simple. There has been a worker compensation claim that your insurance provider has paid. To mitigate the insurance company’s risk, they raise your worker compensation premiums. The bad news is this increased EMR sticks with you for 3 years.

Want to know how Experience Modification Rates are calculated?

The base premium is calculated by dividing a company’s payroll in a given job classification by 100, and then by a ‘class rate’ determined by the National Council on Compensation Insurance (NCCI) that reflects the inherent risk in that job classification. For example, structural ironworkers have an inherently higher risk of injury than receptionists, so their class rate is significantly higher.

A comparison is made of past claims history to those of similar companies in your industry. If you’ve had a higher-than-normal rate of injuries in the past, it is reasonable to assume that your rate will continue to be higher in the future. Insurers examine your history for the three full years ending one year before your current policy expires. For example, if you’re getting a quote for coverage that expires on January 5, 2008, the retro plan will look at 2004, 2005 and 2006.

NCCI has developed a complicated formula that considers the ratio between expected losses in your industry and what your company actually incurred, as well as both the frequency of losses and the severity of those losses. A company with one big loss is going to be ‘penalized’ less severely than a company with many smaller losses because having many small losses is seen as a sign that you’ll face larger ones in the future.

The result of that formula is your EMR, which is then multiplied against the manual premium rate to determine your actual premium (before any special discounts or credits from your insurer). Essentially, if your EMR is higher than 1.00, your premium will be higher than average; if it’s 0.99 or lower, your premium will be less.

How does a high EMR affect costs?

An EMR of 1.2 would mean that insurance premiums could be as high as 20% more than a company with an EMR of 1.0. That 20% difference must be passed on to clients in the form of increased bids for work. A company with a lower EMR has a competitive advantage because they pay less for insurance

How do I lower EMR?

The good news is that EMR can be lowered. If you need help in putting an effective safety program in place that eliminates hazards and prevents injuries contact us at Benton Safety Consultants.  Remember, No injuries equal no claims.

In the real world, injuries will happen, but the response can help keep EMR from increasing as much as it could without proper management. Having a plan to manage injuries and workers compensation claims is a must to get control of the EMR.

Reducing EMR gives you an edge over your competition when bidding out work and save money. Construction general contractors and owners are realizing the benefits of low EMR numbers and often prequalify companies before they even look at bids. It would be unfortunate to lose business and money because of high EMR.


“2014 Liberty Mutual Workplace Safety Index – 10 Leading Causes Of Injuries & Their Cost”


Liberty Mutual Research Institute for Safety Releases 2014 Workplace Safety Index
10 leading causes of injury result in nearly $60 billion in total workers compensation costs

January 14, 2015 10:00 AM Eastern Standard Time
HOPKINTON, Mass.–(BUSINESS WIRE)–The Liberty Mutual Research Institute for Safety has released its 2014 Workplace Safety Index, which ranks the 10 leading causes of workplace injuries and their associated direct workers compensation costs.

“For example, using our tribology research – slipperiness assessment tools – our risk control consultants can actually get in on the ground floor and meet with building designers and architects to recommend flooring standards that create safer interior and exterior walking surfaces”

Overexertion ranked first as the leading cause of disabling injury. The category, which includes injuries related to lifting, pushing, pulling, holding, carrying or throwing, cost U.S. businesses $15.1 billion and accounted for more than one quarter of the top 10 disabling injury causes in 2012, the most recent year for which data are available. All told, the listed injury causes amounted to nearly $60 billion in total U.S. workers compensation costs or more than $1 billion dollars a week spent by businesses on disabling injuries.

The Workplace Safety Index is developed annually by Liberty Mutual researchers based on information from the company’s workers compensation claims, the U.S. Bureau of Labor Statistics (BLS), and the National Academy of Social Insurance. Using BLS injury event coding, researchers determined which injuries caused an employee to miss six or more days of work and then ranked those events by total workers compensation costs.

The top five injury causes accounted for 65.4 percent of the total 2012 workplace injury cost burden, based on Liberty Mutual data. The leading “overexertion” category and the two “falls” categories among the top five combined to generate more than 50 percent of the leading causes of disabling workplace injuries.

Liberty Mutual works with its commercial insurance customers to help them mitigate these and other risks of injury in workplaces of all sizes. Using findings from the Research Institute for Safety, the company’s Risk Control Services team developed a wide-variety of tools and services to help lessen the likelihood of the types of injuries listed in the Workplace Safety Index. To reduce overexertion injuries, Liberty Mutual uses ergonomic assessment tools, including a freely-accessible online calculator, to help businesses understand the risks associated with manual handling tasks including lifting, lowering, pushing, pulling and carrying.

“When we know the acceptable weights and forces that employees can perform under, we use that information to design safer manual handling jobs,” said Wayne S. Maynard, program director, Risk Control Technical Services. “Potentially thousands of manual handling jobs, from construction and industrial to hospitality and healthcare, are now safer as a result of the use of this and other ergonomic assessment tools developed in partnership with our Research Institute.”

According to Mr. Maynard, the direct costs of workplace slips, trips and fall injuries have continued to rise for more than a decade. Utilizing specialized risk control procedures and programs gives businesses the opportunity to be more proactive in facility design. “For example, using our tribology research – slipperiness assessment tools – our risk control consultants can actually get in on the ground floor and meet with building designers and architects to recommend flooring standards that create safer interior and exterior walking surfaces,” Maynard added.

Liberty Mutual Risk Control Services is comprised of hundreds of certified and credentialed consultants organized with dedicated units for specific lines of business and industries. Specialized resources are offered in Enterprise Risk Management, Crisis Management, Disaster Preparedness and Business Continuity. Consultations are available to all commercial policyholders either onsite, by phone or online. For more information about Liberty Mutual Risk Control Services contact Nick Shah, director, Special Projects at 617-654-3532 or Nick.Shah@LibertyMutual.com.

Download a copy of supporting documentation here: http://www.libertymutualgroup.com/omapps/ContentServer?c=cms_document&pagename=LMGResearchInstitute/cms_document/ShowDoc&cid=1138365240689


Even in the Loss Prevention Field, Safety IS a Must! – “Retro Surveillance at the Purple Cow”

Back in the early 80’s I worked for a large retailer with limited video surveillance technology from the 70’s. I’m talking cameras with vacuum tubes in them. Box cameras that really were the size of shoebox. Invariably, they never worked. Between age, little to no maintenance, and multiple points of failure—these cameras were practically useless for critical surveillance.

The retailer was Meijer (now the 13th largest privately owned company in the United States with 75,000 employees). 30 years ago it was definitely a simpler time, but employee theft investigations were as prevalent as they are today. But, from where I sit, they were just much more difficult to conduct.

While camera technology was horrible, cash register technology was only marginally better. NCR cash register systems didn’t give you printed exception reports of any value, but you could “tap” into a register in the store and get a running log of transactions being recorded on an active register. Of course, that only helped when you identified a register/employee that warranted logging of real-time transactions. And the method to determine that was exhaustive.

Back then it involved a daily review of select cash register tapes based on the rudimentary reports the system did provide—or, more likely—on manual cash over and short reports from the night before. While most Loss Prevention professionals in the industry for any length of time know—for the benefit of those who don’t—the overages were often more telling than the shortages. Overages could point to any number of potential register thefts, with failing to record sales being a big one.

At Meijer, we had the Purple Cow. The Purple Cow was the name of the ice cream counter which (at that time) was located inside the front area of a Meijer store, just outside the checkouts. (Stores today typically have a much scaled down version of the Purple Cow located inside the checkouts). It was a pretty typical ice cream counter. You could get 30 or more flavors of ice cream cones or sundaes, along with soft drinks, and baked goods—as a bakery usually shared the counter space.

The Purple Cow is the subject of this review of retro-style surveillance from 30 years ago.

A daily review of register tapes and observation on multiple occasions from afar suggested an employee in the Purple Cow was collecting customer monies for transactions and working from an open register—not recording sales—throughout her entire shift.

When you have an employee putting customer money in the drawer but not ringing in the sale it creates an overage of money in the register drawer. The cashier removes that “extra” money from the register late in her shift to pocket the cash and to make the drawer balance when it gets turned in.

It can be difficult to keep track of how much of an overage has been created during a shift of not ringing up sales (some employees had ways of trying to keep track—but most methods are not exact due to the time it takes and the increased risk of being found out if you take the time to be exact). Because of this, it is not uncommon for a cashier to have collected, let’s say, $43.56 that was not rung up during a shift. As their shift ends they pocket an amount that is easy to quickly take—in this case two twenty dollar bills—leaving the overage of $3.56 when the drawer is counted.

So, how do you confirm that a suspected theft of this nature is taking place? Thirty years ago when your cameras were useless, you had strike one. That caused strike two because you couldn’t really make use of the NCR ability to tap into a cash register without a working camera. Strike three was the very open location of the Purple Cow counter, making surveillance difficult.

Difficult, but not impossible. We went to the ceiling, above the register. More specifically, to me, in the ceiling, above the register. Yes, that is how it was done before we had the security technology we have today. Real people—eyeballs on the scene—up close, but covert.

Here is how it worked. To set the stage you need to know there was a time when these stores were not 24 hour a day operations. They closed at 10PM to customers and while most nights a third shift did cleaning and re-stocked shelves, even that was not every night. So, on nights when no one was in these 130,000 sq. ft. stores, a couple security staff would go in and install a plywood platform, attached by chains to the rafters above the drop ceiling—in areas where investigations were ongoing. In this case, above the Purple Cow register. In most cases we would put in a fake ceiling vent in order to see the register from the platform.

With the platform installed, we’d put the ceiling tiles back in place, clean up the area and put everything back in order like we’d never been there.

Fortunately, in this store (long since torn down and rebuilt 50 yards away), the space throughout the store above the drop ceiling was expansive. This was due to the quonset hut style roof that covered the entire store—with series after series of arching spaces about 50 feet wide above the entire drop ceiling. This structure along with the fire sprinkler piping just above the drop ceiling, allowed for walking on rafters and sprinkler pipes (looking back, the code and safety violations were extensive!) through much of the store above the drop ceiling.

Here is how the surveillance went.

The employee who is suspected of theft is scheduled to work her shift from 5PM – 9PM. I have pre-arranged with another security agent to have them view the scene from afar while I view from the hanging platform. Around 4PM I get up into the ceiling some 200 feet away from the Purple Cow in a backroom where I can do so without being noticed. I am armed with a 35mm camera with a telephoto lens and the entire set-up is wrapped in foam to lessen the sound of the shutter when a photo is taken. I also have a notepad and flashlight to document what I view as I view it. I make my way across the rafters and sprinkler pipes and onto the plywood platform hanging by chains from the rafters. As quietly as possible, I get into position flat on my stomach with my head at the end of the platform so I can view through the vent we put in—seeing the register display, cash drawer, and the surrounding area for a few feet around it.

The employee begins her shift and I begin to document transactions where she does not ring the sale, but puts money into the register. This happens throughout the shift. I write down times and what was sold—cones, drinks, etc…

Sometimes I am watching through the camera lens and sometimes I am just watching directly. The first photo I snap of a no sale transaction is met with worry that I can be heard. To me the sound of my platform and camera are magnified—partly due to my precarious position, partly due to my hypersensitive state upon seeing that theft is occurring and I am witnessing it from less than six feet away.

A little after 8:30 I am watching the employee standing at the closed register. Business has slowed. Her shift ends soon. And, as is often the case after having done this for a couple years now, it becomes apparent that she is visibly nervous—scanning in all directions around her and moving very little. She opens the cash register drawer with no customers around, and stands very close to the register. I watch as she quickly removes two twenty dollar bills from the register, rolling them into one hand, still looking around and then pocketing the bills into her right front pants pocket, using her apron to slightly conceal the theft. The drawer is closed. The overage she had been creating all night by not ringing in sales is now removed—and in her pocket. I took photos but even I am unsure if I caught the exact moment of the theft. The employee moves away from the register and from my view, but I can hear her cleaning up her work area below me.

Soon, I feel it is safe to move from my hanging platform and make the trek across the rafters and pipes and back to where I am out of the ceiling. I meet my co-worker on the sales floor—watching things unfold from a distance. I inform him that we have the theft documented. We wait a bit longer, observing from a distance as the acting store manager arrives to review the work area and ensure it is clean before allowing the employee to cash out and end her shift. As she is cleared to go and removes her drawer for the short walk to the cash office, my co-worker and I approach and ask to speak to her in the security office.

Because the focus of this article is on surveillance, I’ll cut to the chase. We took a written statement where the employee confessed to the theft and to doing the same thing on every shift she worked for about the last month—estimating about 10-12 times for a total of maybe $400-$500. We have the acting store manager and a union steward come to the security office. The manager suspends the employee based on the written statement. (A couple of days later, the Store Director terminated the employment of the employee).

That, my readers, is how covert surveillance was done 30 years ago—when technology was horrible. Call it “Old School” if you will—I certainly do. Although calling it resourceful, and maybe even crazy, would also be in order. If nothing else it demonstrated something about going the extra mile to conduct an investigation for our employer.

Over the years I have conducted close to 500 employee investigations—in multiple industries. I am happy to report that technology over that time has improved and the bulk of those investigations benefited from more modern surveillance and point-of-sale technologies.

If I add it all up, I may have spent 200 hours hanging from plywood platforms in those early days—not always over the Purple Cow—but on nearly a dozen similar set-ups in that ceiling.

That is my Retro Surveillance story from the Purple Cow.

In 30 years, of course, there are many stories, but I don’t share them from a perspective of “the good ole days” or anything of the sort. I share this one for a couple of reasons.

One, I share it as a change of pace. The Security/Investigations business is a very serious business and often our daily responsibilities are filled with never-ending seriousness. A brief trip back to an earlier time allows for a laugh or two at how much things have changed.

But, more importantly, I share the story for those coming up in the security/investigations business. Because I think the story (even with the craziness of the Purple Cow) helps illustrate that—whatever your security task or investigation—and whatever challenges or obstacles you might run into—YOU can work with what you have to accomplish your task. That task may be to impact the absolutely crippling effects of employee theft on business, or it may be protecting a facility from countless potential threats.

In the end, technology or no technology, this business is still a people business and security and investigations professionals can’t lose sight of that

About Vince Regan

Vince Regan, CPP, PSP, PCI is one of the most highly credentialed security professionals in the world. As Voice of Security President, he works full time to inform and educate colleagues in the security industry.

View all posts by Vince Regan →

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