BTHE BARATELLI INSTITUTE · Mentoring at Scale
FOR CONTRACTORS · EQUIPMENT DEALERS · HVAC · RESTAURANTS · FLEETS · ANY OPERATOR WITH FIELD WORKERS

Workers comp is the biggest single SG&A line nobody models.

Premium is rate × payroll × EMR, and the EMR (Experience Mod Rate) compounds. Every claim costs you twice: the claim itself, and three years of inflated premium that follows. Most operators see the renewal once a year, accept it, and move on. This tool puts EMR on the table where you can decide what it's worth to fix.

EMR
3-yr lookback
Premium
rate × payroll × mod
Claim impact
3-yr compound
Safety ROI
premium reduction
YOUR COMP PROGRAM
1
Payroll & class code
2
EMR & carrier
3
Claims history
4
Safety program
5
Results & recommendations
STAGE 1 OF 5

Payroll & classification

Workers comp premium starts with two numbers: classification rate (per $100 of payroll) and the payroll subject to comp. Class codes drive 80% of base cost.

For monopolistic states (ND, OH, WA, WY), premium structure is set by the state fund, not NCCI. Tool defaults assume NCCI methodology.
The dominant code for your covered payroll. Listed common ops codes — check your declarations page for your assigned code.
Total gross payroll for employees subject to workers comp. Most W-2 wages; some states cap individual exposure (e.g., max payroll per executive officer).
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The base rate filed with the state for your class code, before EMR and credits. From your declarations page. Sheet metal: $4-9. Trucking: $4-12. Restaurant: $1-3. Office: $0.20-0.50.
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Underwriter discretion: schedule credits for safety record, equipment, training. Range typically -25% to +25%. Negative = credit.
%
EMR jurisdiction warning. Experience-mod calculation is rating-bureau-dependent. NCCI methodology (38 jurisdictions) uses an Expected Loss Rate (ELR) table and a Primary/Excess split with a Weighting Value and Ballast. California (WCIRB), New York, NJ, PA, Delaware, MA have independent bureaus with their own formulas. Monopolistic states (OH, WA, ND, WY) use state-fund retro/discount programs instead of EMR. This tool produces directional estimates; your actual mod is calculated and published annually by your rating bureau. Confirm with your broker or rating-bureau worksheet before negotiating.
STAGE 2 OF 5

EMR & carrier structure

EMR is the comparison of your actual losses to the expected losses for your class code over a 3-year window (lagged 1 year — current EMR uses losses from years T-4, T-3, T-2). EMR < 1.00 = better than peers. EMR > 1.00 = worse, with premium penalty.

From your declarations page or rating-bureau worksheet. Industry average is 1.00 by construction; best-in-class contractors: 0.65-0.85. Trouble: above 1.20.
Realistic 3-year target. Most operators can reach 0.80 with a real safety program. Going below 0.70 requires significant operational change.
Per-claim deductible or self-insured retention. Standard policy: $0. Large-deductible (1K, 5K, 10K, 25K, 100K, 250K, 500K) typically saves 15-40% of premium but you pay the first $X per claim. The deductible-credit play is the single largest premium-engineering tool for stable carriers.
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Some carriers (mutuals, captive arrangements) pay back a dividend based on loss performance. Typically 0-12%.
%
STAGE 3 OF 5

Claims history — the 3-year window that matters

EMR uses 3 years of claims data on a 1-year lag. A single $50K claim moves your EMR by approximately 0.10-0.15 for THREE years — often $20-80K of extra premium. Frequency hurts more than severity (primary loss weighting), which is why a string of small claims is worse than one big one.

All reported claims, including medical-only. Frequency drives EMR primary losses.
Total losses (paid + reserved) divided by claim count. Contractor average: $15K-40K. Restaurant: $5K-15K. Trucking: $25K-80K.
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Open claims with reserves still on the books. These can be reduced via reserve disputes if reserves exceed likely settlement.
The big one. Severity drives excess losses (less heavily weighted than frequency but still significant).
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Indemnity claims are weighted more heavily than medical-only in EMR. A claim becoming lost-time can double its EMR impact.
Modified-duty/return-to-work programs cap lost-time exposure. The single highest-ROI claims-management lever.
STAGE 4 OF 5

Safety program — the investment case

A real safety program is the single largest controllable lever on the comp line. Compare the cost of a safety manager (or third-party safety services) against the premium reduction from a sustained EMR drop.

Safety manager salary, training, PPE program, third-party services, OSHA compliance. Include allocated time of operations leaders.
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Adding a dedicated safety manager: $70-130K/yr loaded. Third-party safety consulting: $25-60K/yr. Just a training upgrade: $8-20K. Enter the addition.
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Realistic reduction over 3 years from incremental investment. Adding a safety manager to a previously bare-bones program: 0.10-0.20 EMR drop. Marginal improvements: 0.03-0.08.
EMR is a 3-year rolling window, so safety improvements lag. Year 1 partial; Year 2-3 full effect.
Two-sided trade on claims. The cheapest claim is the one that never happens. The second-cheapest is the one that returns to work in 14 days. The most expensive is the one with reserves left open for 18 months while the adjuster reserves to the worst-case scenario. Three claims-management levers: (1) dispute open-reserve set quarterly — reserves often exceed likely settlement by 30-50%, (2) return-to-work programs convert lost-time claims into medical-only, halving EMR impact, (3) the deductible/SIR play — if you trust your claims and have the cash flow to absorb first-dollar exposure, large deductibles save 15-40% of premium for stable carriers.
STAGE 5 OF 5

Results & recommendations

EMR position, 3-year premium projection, safety-program ROI, and the deductible / claims-discipline picture on one page.

HERE, TRY THESE. THEY MAY HELP.

Three honest links — no forms, no email capture.

The premium math is the easy part. The harder part is the operating discipline: safety culture, claims management, return-to-work programs, and the renewal negotiation with your broker. The guides walk through it.

CFO & Controller's Guide Business Operators Blueprint All free tools
Practitioner reference. Workers comp premium and EMR are jurisdiction-specific and rating-bureau-specific. NCCI methodology applies in 38 states; California (WCIRB), New York (NYCIRB), New Jersey (NJCRIB), Pennsylvania (PCRB), Delaware, and Massachusetts use independent bureaus with their own formulas. Monopolistic states (Ohio, Washington, North Dakota, Wyoming) use state-fund pricing instead of EMR. This tool produces directional estimates using a simplified EMR model and the manual rate you enter; your actual EMR is calculated and published annually by your rating bureau. Class-code rates, schedule credits, and dividend programs vary by carrier and state. Confirm with your licensed property & casualty broker, rating-bureau worksheet, and CPA before making renewal decisions. This is not insurance, financial, tax, or legal advice.
WANT THE METHODOLOGY BEHIND THIS TOOL?
This calculator pairs with CFO & Controller's Guide and Business Operators Blueprint.
The tool gives you the EMR / premium math. The guides give you the surrounding operating discipline — safety program governance, claims management cadence, RTW protocol design, broker negotiation, and the SG&A budget conversation with your CFO. Three honest links. Here, try these. They may help.
CFO & Controller's Guide → Business Operators Blueprint → All free tools
PROFESSIONAL DISCLAIMER · PLEASE READ

Educational and informational purposes only. This calculator and any output it produces are intended solely for general educational and decision-support purposes. They do not constitute insurance, investment, tax, legal, accounting, lending, or any other professional advice, and they do not create a fiduciary, broker-client, attorney-client, or advisor-client relationship of any kind.

EMR is jurisdiction-specific. Workers comp premium and Experience Mod calculation are governed by the rating bureau applicable in your state. NCCI applies in 38 jurisdictions. California (WCIRB), New York (NYCIRB), New Jersey (NJCRIB), Pennsylvania (PCRB), Delaware (DCRB), Massachusetts (WCRIBMA), and certain others use independent state rating bureaus with their own formulas. Monopolistic states (Ohio, Washington, North Dakota, Wyoming) use state-fund pricing with no traditional EMR. Use the appropriate bureau's ELR (Expected Loss Rate) table, Weighting Value (W), Ballast (B), and State Per Claim Accident Limitation. This tool produces directional estimates only.

Estimates based on your inputs. All results are estimates derived from the data and assumptions you provide. Class-code rates, schedule credits, large-deductible credits, dividend programs, and EMR calculations vary by carrier, state, and rating bureau. The Baratelli Institute, its affiliates, and any co-branding professional make no warranty of accuracy, completeness, currency, or fitness for any particular purpose, and disclaim all liability for decisions made in reliance on the output.

Consult your own qualified professionals. Before acting on anything calculated here, consult your own licensed property & casualty broker, risk manager, CPA, or attorney experienced in workers comp in your jurisdiction. The Baratelli Institute is a publisher of practitioner reference material. It is not an insurance broker, registered investment adviser, law firm, accounting firm, or lender.

Co-branded versions: If a professional advisor's name and contact information appear on this tool, that advisor has elected to make the tool available to clients as a courtesy. Inclusion of an advisor's name does not constitute the advisor's endorsement of any specific result.

Educational references and tools — not legal, tax, accounting, or investment advice, and not a recommendation to buy or sell any security. Consult a qualified professional about your specific situation. © 2026 The Baratelli Institute.