How is EMR calculated?

EMR is calculated by an insurer or a state rating bureau, not by the contractor. It compares a company’s actual claims cost, both the frequency and the severity of claims, against the expected claims cost for similar-sized companies in the same industry classification over a rolling three-year period, typically the two years before the most recently completed one. The formula weights frequency more heavily than severity, so a pattern of smaller frequent claims can hurt the score more than one large but isolated claim. The exact calculation involves actuarial tables most contractors never see directly, only the resulting number.

What EMR do most owners require to bid?

There is no universal rule, but 1.0 or below is a common prequalification cutoff on many bid forms, since that is the industry average or better. Some owners, especially on larger or higher-risk projects, set the bar lower, around 0.75 to 0.9, to screen for contractors with a meaningfully stronger-than-average record. An EMR above 1.0 does not legally bar a company from bidding, but it often triggers additional questions, a higher insurance premium passed through in the bid, or outright disqualification depending on the owner’s prequalification policy.

Why does EMR matter alongside TRIR rather than instead of it?

Because TRIR measures frequency within a single year and resets every period, while EMR carries a rolling history and is weighted by the actual dollar cost of claims, not just the count. A contractor can have a middling TRIR in a given year but a strong EMR built from several prior clean years, or the reverse: a good TRIR this year sitting on top of an EMR still elevated from a costly claim two years ago. Owners who use both are reading two different time horizons on the same safety record, a recent snapshot and a multi-year cost trend.

Construction Glossary · Safety

ExperienceModification Rate

One decimal, set by an insurer, follows a contractor onto every bid. Below 1.0 it saves money; above 1.0 it costs money and closes doors.

Definition

An insurer-set multiplier on a company’s workers’ compensation premium, based on its claims history compared to similar-sized peers in the same class code. A rate of 1.0 is the industry average; below 1.0 earns a premium credit for better-than-average safety, above 1.0 triggers a surcharge, and many owners use it to prequalify bidders.

Credit on one side, surcharge on the other

1.0 is the industry average for a company's class code. With an EMR of 0.85, a firm with 3 recordables and an insurer EMR well below average sits inside the credit zone and pays less for the same coverage. That gap between 0.85 and the 1.0 baseline is not just a number on a certificate; insurers apply it directly as a multiplier to the premium due, so a credit below 1.0 shows up as real savings on every renewal, not just as a favorable statistic.

How EMR compares to a yearly rate

TRIR resets every year; EMR carries a rolling multi-year cost history. Owners who ask for both are checking two different clocks. Because EMR looks backward across three years while TRIR looks at the current one, a contractor's EMR can still carry the weight of an incident from two years ago even after a clean recent stretch, which is why both numbers are read together rather than one replacing the other.

Measure	Time window	Set by
TRIR	The current reporting year	The contractor, from its own OSHA log
EMR	A rolling three-year claims history	The insurer or state rating bureau

EMR is built from the same underlying claims history that OSHA recordkeeping captures, and feeds the same TRIR conversation, just priced in dollars instead of counted in cases.

How POD surfaces EMR

EMR is calculated by your insurer or rating bureau, not by POD. POD surfaces the EMR you report next to your recordable history; it does not compute or set it.

EMR in construction guide

Frequently asked questions

A multiplier built on the same cases

The claims behind EMR are counted the same way the current year's recordables are.

TRIR Back to the Glossary

Related terms

TRIR OSHA Recordkeeping DART LTIR