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Credit Modifier

A Workers Compensation Term Defined, Described and Explained

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Credit Modifier

This is a term used in the insurance industry that indicates a downward trending experience modification factor. A downward trend in your experience mod factor will indicate a likewise lower than average trend in your workers compensation losses.


The real importance of this work comp term is not the term itself but what it means to an employer. The downward trend in their experience mod factor will lead to a reduced cost of the employers workers comp insurance program. You will find there are many factors used when computing the deposit and ultimately the final premium a workers comp policyholder pays. The trending of any employers experience modification factor is very useful in projecting future costs the employer will have to pay for his coverage. In other words, if it is known that a credit modifier is being used in the calculation of his experience mod then the employers insurance agent should be able to better project over the next couple of years the premiums an employer will be thus allowing for better, more acurate cost budgeting on the employers part.

The workers comp credit modifier is a good thing! So if you're an employer and you've been told by your insurance agent or broker that you have a credit modifier...be happy! It simply means that the downward trending e-mod factor will result in lower workers compensation premiums for you and your business. Be sure to ask your agent to work out a projection over the next couple of years so you have a good idea what to expect as far as cost for your work comp insurance.




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