EMR??_ Experience Modification Rate - if this term is unfamiliar read on.
Indirect costs absorbed by employers due to accidental claims are often difficult to quantify. Indirect costs range from 3 to 10 times the total direct costs. Indirect costs include:
Lost productivity ??? work stops for the injured worker, but also for co-workers who render first aid, stand around watching emergency responders, workers spend time discussing the event. Depending on the severity projects shut down for the work day or beyond. When serious accidents occur investigations take place. NYC regulatory and federal agencies like OSHA can also shut not only your business but surrounding businesses. This loss of time and productivity costs the employer. Serious accidents where a hazardous condition was allowed to exist have a negative impact on employee morale. Poor morale = poor productivity.
Continued payment of employee benefits ??? While the injured worker is unable to perform their normal duties, the employer is still responsible for all costs.
Costs for investigation ??? Supervisors must file accident investigation reports.
Workers?? Comp claims ??? Depending on the severity of the injury, Workers?? Comp claims can last for months & years.
Cost of hiring and training a replacement ??? Should an employee be disabled the employer needs to find & train replacements. The lack of a skilled supervisor can lower the productivity of an entire crew & increase production costs.
Damages??? Following an accident repair or replacement of completed work is often necessary. The costs of repair work performed by other workers or subcontractors, is the responsibility of the employer. The costs cannot be passed on to the client.
Re-scheduling work & O/T costs ??? An accident can delay a deadline in a time & performance contract. Overtime may be necessary to get the project back on schedule or other contrcatual costs are levied to the employer
These direct and indirect costs significantly impact an employer??s bottom line profitability.
A favorable Experience Modification Rate, will save the employer money on the cost of Workers?? Comp Insurance. A poor EMR not only costs the employer more money for the same coverage, it can also prohibit the employer from bidding on new projects. Additionally his bid will be higher to offset his new sky rocket insurance premiums for the next three to five years.
If you need to explore ways in reducing your EMR drop me a note.
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