Experience Modification Rate (EMR)
A number, baselined at 1.0 for the industry average, that adjusts a contractor's workers' compensation premium based on its own actual claims history over the past three years (usually with a one-year reporting lag) compared to similar companies. A rating below 1.0 means a better-than-average safety record, above 1.0 means worse.
Why it matters
Many public agencies and general contractors set an EMR ceiling, often 1.0, as a hard prequalification bar for bidding, which means a bad safety year doesn't just raise a contractor's insurance premium, it can lock them out of entire categories of work for the next few years while that claim ages out of the calculation.
On a real project
A contractor with a strong 0.75 EMR pays noticeably less for workers' compensation coverage than a competitor bidding the same job with a 1.2 EMR, purely because of their respective claims histories, not because of anything else about the two companies.
Who this matters most to
A Risk Manager tracks and actively works to improve a contractor's EMR, while a Loss Control Engineer's jobsite inspections are part of what actually keeps it down by catching hazards before they become claims.
Where this goes wrong
A general contractor with an otherwise competitive bid gets disqualified from a public project because its EMR sits at 1.15, above the agency's 1.0 prequalification ceiling, a single bad claims year years earlier locking the company out of the bid regardless of price.