How to Report Your EMR on a Prequalification Form

General contractors, facility owners, and third-party prequalification platforms almost always ask the same insurance question before they let a contractor bid: list your experience modification rate (EMR) for the last three years. It looks like a one-line answer. In practice it raises four questions that trip up a lot of small contractors: which three numbers, where to get proof, what to write if you don’t have a mod, and what happens to the mod when the company changes hands.

Which “Three Years” the Form Means

Your EMR changes once a year, on its rating effective date — usually your workers’ comp policy anniversary. The form wants the three most recent mods, each with its effective date, most recent first.

Each of those mods is itself built from a three-year experience period that ends about a year before the rating date. A mod effective July 1, 2026, for example, is typically based on policy years running from mid-2022 to mid-2025; the most recent year is left out because its claims aren’t mature enough to value. So three mods together reflect roughly five to six years of payroll and claims — which is why one bad year can follow a contractor across several prequalification cycles.

Illustration for a July 1 policy anniversary. Your own dates follow your rating effective date, and state rules vary.

Where the Number — and the Proof — Comes From

Your current mod appears on your workers’ comp policy’s rating pages, next to the premium calculation. But most prequalification reviewers want more than a number you typed in. They want an EMR letter from your agent or carrier on letterhead, showing:

• each of the three mods and its effective date;
• the rating organization that calculated it — NCCI, or an independent state bureau;
• whether it is an interstate mod (one mod across several NCCI states) or an intrastate mod for a single state.

Ask for the experience rating worksheet as well. It shows the payroll, expected losses, and actual losses behind each mod, and it’s the document you’ll need if a reviewer questions the number or if you think it’s wrong. Our EMR calculator walks through how those inputs combine.

If You Don’t Have an EMR

Many small and newer contractors don’t have a mod at all. Experience rating only applies once a business has enough premium over the experience period to be statistically meaningful, and the threshold varies by state. A business that doesn’t qualify is rated at unity — 1.00.

On the form, that means:

• Enter 1.00, not 0, “N/A,” or a blank. Many platforms score the field automatically, and a 0 or blank can fail the check or trigger a manual review that delays approval.
• Attach a letter from your agent or carrier stating that the business is not currently eligible for experience rating, and briefly why (for example, years in business or premium size).
• If you’re about to become eligible, say so. A reviewer would rather know that your first mod is coming at your next renewal than discover it later.

More Than One Mod: Bureau States and Monopolistic Funds

Contractors working in several states can legitimately have more than one EMR. Most states use NCCI, which can combine experience into a single interstate mod. But several states run their own rating bureaus — including California, New York, Pennsylvania, New Jersey, Delaware, Michigan, Minnesota, North Carolina, Wisconsin, Indiana, and Massachusetts — and the four monopolistic state-fund states (Ohio, North Dakota, Washington, and Wyoming) rate employers through their own systems.

When a form asks for one number, report the mod that applies to the state where the work will happen, or your interstate mod if the project is in an NCCI state, and disclose any others in the comments. Leaving a higher intrastate mod off a form is the kind of omission that surfaces later, usually when the reviewer pulls your certificate. Our state workers’ comp guides list the rating organization for each state.

Buying a Company or Changing Entities Doesn’t Reset the Mod

A common assumption is that forming a new LLC or buying an existing business gives you a clean slate. Usually it doesn’t. In NCCI states, the workers’ comp policy includes an endorsement requiring you to report ownership changes — including mergers, acquisitions, and changes in legal entity — within 90 days, typically on Form ERM-14. The rating organization then decides whether the old experience combines with, transfers to, or is excluded from the new entity, and issues a letter and a recalculated mod.

In many cases the prior experience carries forward, because the operations, workers, and risk haven’t really changed. If you’re buying a business, ask for its mod and loss runs before closing; if you’re restructuring, expect the existing mod to follow you, and make sure the ERM-14 is filed so the mod on your prequalification form matches what the bureau will eventually publish.

What Your Number Means to a Reviewer

Ceilings of 1.00 are the most common; some owners and higher-hazard programs set 0.90 or lower. If your mod is above a client’s ceiling, a short written explanation — one large claim that has since closed, a classification error being corrected, a safety program already in place — sometimes keeps you in consideration, especially with a falling trend across your three mods.

The Questions That Usually Come Next: TRIR and DART

Prequalification forms rarely stop at the EMR. They usually also ask for your OSHA 300A summaries and two rates calculated from them:

• TRIR (total recordable incident rate) = number of OSHA-recordable cases × 200,000 ÷ total hours worked.
• DART (days away, restricted, or transferred) = number of DART cases × 200,000 ÷ total hours worked.

The 200,000 represents 100 full-time employees working a year, which puts companies of different sizes on the same scale. Keep the hours figure consistent with your payroll records — reviewers compare them.

Before You Submit: Check the Mod Is Right

An EMR can be wrong, and correcting it is often faster than improving it. The most common problems are claims still reserved at more than they will actually cost, payroll assigned to the wrong class code, and claims from a different entity showing up on your worksheet. Compare the worksheet against your own loss runs, and ask your carrier to review over-reserved claims before the next valuation date. For how contract insurance clauses work once you’re through prequalification, see insurance requirements in contracts.

Frequently Asked Questions

What does 'list your EMR for the last three years' mean on a prequalification form?

It asks for your three most recent experience modification factors, each with its rating effective date, usually your policy anniversary. Each mod is built from about three years of past payroll and claims, so three mods together reflect roughly five to six years of loss history.

What EMR should I enter if my company doesn't have one?

Businesses that are too new or too small to qualify for experience rating are rated at unity, 1.00. Enter 1.00 rather than 0 or N/A, and attach a letter from your agent or carrier stating that the business is not currently experience-rated and why.

Where do I get an EMR letter?

From your insurance agent or carrier, on letterhead. It should list each mod with its effective date, the rating organization (NCCI or your state bureau), and whether the mod is interstate or intrastate. The underlying experience rating worksheet can also be requested from your agent or the rating bureau.

Does buying a company or changing my LLC reset my EMR?

Not automatically. In NCCI states, ownership changes must be reported on Form ERM-14 within 90 days under the policy's ownership-change endorsement, and the rating organization decides whether the prior experience transfers to the new entity. Many changes carry the old mod forward.

Is an EMR of 1.57 bad?

Yes, for most bidding purposes. An EMR of 1.57 means paying about 57% more than the average manual premium for your classes, and many general contractors and owners set a ceiling of 1.00, sometimes lower. It typically reflects several claims, or one very large one, during the experience period.

This content is for informational purposes only and does not constitute insurance, financial, or legal advice. Experience rating rules, eligibility thresholds, and ownership-change procedures vary by state and rating organization — confirm specifics with your agent, carrier, or rating bureau.