Using EMR to Qualify Contractors

Experience modification rate, or more commonly EMR, is a metric that has been used by many industries for the purposes of prequalifying vendors and subcontractors.  The rate is based on a company’s previous workers compensation claims against payroll and other factors, to determine either an increase or a decrease in a company’s premiums.

Recently Appruv Director of Operations Chris Black had the opportunity to participate in a panel discussion at the Association of General Contractors (AGC) 2020 Construction Safety & Health Conference regarding the use of EMR as a prequalification tool and what other metrics, data or sources of information a company can use to help evaluate the safety of their subcontractors.

Here are a few key takeaways from the panel discussion that you can use to strengthen your own prequalification program:

•  Understand that EMR is the result of a complicated formula with many factors that can influence the rating.  Any contractor that reports a high rating, typically above 1.0, should be awarded the opportunity to explain and provide further documentation.  Often times the insurer will provide a letter of explanation or loss run report that details the claims that resulted in the high rating.
• Another common practice is the use of OSHA incident rates such as TRIR and DART.  These rates show historical performance based on data compiled from the company’s OSHA 300A Annual Summary and can provide valuable insight into trends and significant injuries or illnesses a company may have had.
• Historical data such as EMR and OSHA incident rates can provide significant detail of a company’s past performance but it’s also important to understand what a company is doing today, the strengths of their safety program and overall safety culture.  This can include a review of their written safety programs, verification of completed training programs and other elements such as incident investigation practices or worksite inspections.

Understanding EMR and taking an active role in managing the factors involved in it takes some effort, but the reward can be significant.  And while EMR is one way to measure contractor performance, it needs to be part of a well-balanced job safety and health plan.  Appruv’s contractor, supplier, and vendor prequalification platform incorporates both lagging and leading indicators into the process as well as other factors and is a leader in the field for identifying the quality and effectiveness of a safety and health program. Contact Appruv today to learn more about how we can help!