Author: Grit Insurance Group
Your workers comp bill shows up and it hits like a second truck payment. Maybe it is 30% of your payroll. Maybe more. You know roofing is expensive to insure, but you do not know why the contractor down the road - running the same size crew, doing the same type of work - is paying thousands less for the same coverage.
The answer is your experience modification rate.
Most roofing contractors know the number exists. Some have heard their agent mention it during renewal. But very few understand how it actually works, how it is calculated, or that they have real control over it. That is a problem, because for roofers, the EMR is the single biggest variable between a workers comp bill that is manageable and one that is eating your profit.
This article breaks down exactly what the experience modification rate is, why roofing contractors get hit harder than almost any other trade, and the specific steps you can take to bring your mod down and keep it there.
The experience modification rate - also called the EMR, e-mod, or mod factor - is a number that adjusts your workers compensation premium based on your company's claims history compared to other businesses in your industry.
Think of it like a credit score for workplace safety. The baseline is 1.0. If your claims history is better than average, your mod drops below 1.0 and you get a credit on your premium. If your claims history is worse than average, your mod goes above 1.0 and you pay a surcharge.
The EMR is calculated by the National Council on Compensation Insurance (NCCI) in 36 states. The remaining states use independent rating bureaus, but the concept is the same everywhere. Your mod is recalculated once a year before your policy renews, and it uses three years of claims data - skipping the most recent policy year to allow time for claims to develop.
New businesses start with a 1.0 mod for their first three years until enough data exists to calculate a real number. After that, your history speaks for itself.
Roofing is classified under NCCI class code 5551 - and it carries some of the highest workers compensation rates in the entire construction industry. Depending on your state, base rates for roofing can range from $10 to $40 or more per $100 of payroll. In high-cost states like California (class code 5552), rates can climb even higher, with some carriers filing rates above $80 per $100 of payroll (WorkersCompensationShop.com, 2025).
Compare that to an electrician at roughly $2 to $8 per $100, or a plumber at $2 to $8 per $100. Roofers can pay five to ten times what other trades pay for the same amount of payroll.
The reason is simple: the injury and fatality numbers are brutal.
| Statistic | Data | Source |
|---|---|---|
| Roofing fatalities in 2023 | 134 deaths (up 8% from 2022) | BLS Census of Fatal Occupational Injuries, 2023 |
| Roofer fatality rate | 51.8 per 100,000 workers (3rd deadliest civilian occupation) | Roofing Contractor, 2024 |
| Falls as cause of roofing deaths | 110 of 134 fatalities (82%) | BLS, Fatal Falls in Construction, 2023 |
| All-industry fatality rate | 3.5 per 100,000 workers | BLS, 2023 |
| OSHA fall protection violations (FY 2025) | 5,914 citations - #1 most cited standard for 15th straight year | OSHA / NSC, 2025 |
Roofers accounted for 26% of all fall-related fatalities in construction in 2023 - more than any other single trade (BLS, 2025). Insurance carriers see these numbers every year, and they price accordingly. That is why your base rate is already high before the mod even gets applied.
When your base rate is $25 per $100 of payroll instead of $3, every tenth of a point on your mod costs you real money. A 1.2 mod on a plumbing contractor might add a few thousand dollars. A 1.2 mod on a roofing contractor can add $20,000 or more.
The formula is complex, but here is the plain English version of what matters.
NCCI takes your company's actual incurred losses over a three-year experience period and compares them to the expected losses for a company of your size in your classification. The ratio of actual to expected is the core of your mod.
But not all losses are weighted equally. Every claim gets split into two pieces at a dollar threshold called the split point:
Primary losses carry full weight in the formula. Excess losses are heavily discounted.
This is the most important thing to understand: the EMR formula penalizes frequency more than severity. Three small claims will hurt your mod more than one large claim of the same total dollar amount.
Two other key factors:
Let us put real numbers on this. Consider a mid-size roofing company with $400,000 in annual payroll in a state where the base rate is $20 per $100 of payroll.
| EMR | Manual Premium | Mod-Adjusted Premium | Annual Difference vs. 1.0 |
|---|---|---|---|
| 0.80 | $80,000 | $64,000 | -$16,000 (savings) |
| 1.00 | $80,000 | $80,000 | $0 (baseline) |
| 1.15 | $80,000 | $92,000 | +$12,000 |
| 1.30 | $80,000 | $104,000 | +$24,000 |
| 1.50 | $80,000 | $120,000 | +$40,000 |
Over three years, the difference between a 1.3 mod and a 0.80 mod is $120,000. That is a truck. That is a crew lead's salary. That is money coming straight out of your profit margin on every job you bid.
And it gets worse. Many general contractors and project owners will not hire subcontractors with an EMR above 1.0 during prequalification for bonded projects. A high mod does not just cost you money - it locks you out of work.
Your EMR is not a fixed number. It changes every year based on what goes into the calculation. Here is what you can control.
This is not a binder on a shelf. A real safety program for a roofing company includes daily toolbox talks, fall protection training for every crew member, equipment inspections, and documented hazard assessments before every job. OSHA's fall protection standard (1926.501) is the most cited violation in construction for 15 consecutive years. If your crews are not trained on fall protection, you are playing with fire - and your mod will reflect it.
Remember: three small claims hurt more than one big one. The fastest way to blow up your mod is a string of minor injuries - strains, sprains, small cuts that each turn into a filed claim. Invest in prevention at the job-level: proper staging, stretching programs before shifts, and enforcing PPE every single day. Stop the small stuff and the big stuff often takes care of itself.
This is one of the most powerful EMR tools available to roofing contractors. When an injured worker comes back on modified duty instead of sitting at home collecting lost-time benefits, two things happen:
Modified duty does not mean putting someone with a back injury on a roof. It means warehouse work, material sorting, safety training, equipment maintenance, or office tasks. The point is keeping them on the payroll and keeping the claim classified as medical-only. According to the Texas Department of Insurance, employers with effective return-to-work programs see significant reductions in both claim duration and total workers compensation costs (TDI Return-to-Work Guide).
Delayed reporting is one of the biggest drivers of inflated claims. When an injury gets reported two weeks after it happens, the carrier loses the ability to manage the claim early, direct care to an occupational health clinic, or investigate the circumstances. Late reporting leads to higher medical costs, longer lost time, and bigger numbers hitting your mod.
Set a rule: every injury gets reported the same day, no exceptions. Train your foremen on this. Make the process simple.
Your EMR is based on incurred losses, which include both paid amounts and reserves. A reserve is the insurance company's estimate of what a claim will ultimately cost. If a $5,000 claim has a $30,000 reserve sitting on it, your mod sees $30,000 - not $5,000.
Work with your insurance agent to review open claims at least quarterly. Push for reserve reductions when medical treatment is progressing well. Close out claims as fast as possible. If your agent is not reviewing your claims with you regularly, you need a different agent.
NCCI class code 5551 covers roofing work - but not every employee at your company belongs in that code. Office staff should be classified under 8810 (clerical), yard and warehouse workers may fall under 8227 (construction yard), and sales staff have their own code. If your entire payroll is dumped into 5551, you are overpaying on base premium and inflating the expected losses used in your mod calculation. A proper classification audit can save thousands before you even touch the EMR.
Your experience rating worksheet is a detailed document showing every claim, every payroll figure, and every factor used to calculate your mod. Errors happen. Claims that should be closed still show open reserves. Payroll gets assigned to the wrong year or classification. Medical-only claims get coded as lost-time claims.
Request your worksheet from NCCI or your state rating bureau. Sit down with your agent and go through it line by line before your renewal. If you find errors, your agent can file corrections that may lower your mod before the new policy period starts.
The EMR uses a rolling three-year window. That means a bad year sticks with you for three renewal cycles before it drops out. But it also means every clean year you add pushes a bad year closer to the exit.
If you start a real safety program and return-to-work program today, you will not see the full impact for two to three years. But the trajectory changes immediately. Your agent can model what your mod will look like as bad years cycle out and clean years cycle in. That forward-looking number is powerful - especially when you are trying to bid work that requires an EMR under 1.0.
The roofing contractors who figure this out early do not just save on insurance. They win more bids, qualify for better bonding programs, attract better workers, and keep more profit on every job. The ones who ignore it keep writing bigger checks every year and wondering why.
Any EMR below 1.0 is considered good. The average is 1.0, meaning your loss history matches industry expectations. Top-performing roofing contractors with strong safety programs often maintain EMRs between 0.75 and 0.90. Getting below 1.0 not only lowers your premiums - it can also qualify you for jobs that require contractors to meet an EMR threshold during prequalification.
The experience modification rate uses three years of claims data, skipping the most recent policy year. That means changes you make today will not fully show up in your EMR for two to four years. If you stop having claims now, the bad years will cycle out over the next few renewal periods. The sooner you start, the sooner those clean years enter the calculation.
Yes. In most NCCI states, medical-only claims - where the injured worker does not miss time from work - are discounted by 70% in the EMR calculation. This is one of the strongest arguments for having a return-to-work program. If you can get an injured worker back on modified duty so the claim stays medical-only, the impact on your mod is dramatically reduced.
Yes. Your EMR appears on the declarations page of your workers compensation policy. You can also request your full experience rating worksheet from NCCI (in the 36 states where they operate) or from your state's rating bureau. Your insurance agent should review this worksheet with you every year before renewal. If they are not doing that, find an agent who will.
Roofing is classified under NCCI class code 5551, one of the most expensive classifications in workers compensation. The rates reflect the real risk. Roofing had 134 workplace fatalities in 2023, with 82% caused by falls (BLS, 2025). The fatality rate for roofers is 51.8 per 100,000 workers, compared to 3.5 for all industries. Insurance carriers price this risk into the base rate, which is why roofing rates range from $10 to $40 or more per $100 of payroll depending on your state.
If your experience mod is above 1.0 - or you have never had an agent actually walk through your mod worksheet with you - it is time for a different conversation. The Grit team works with roofing contractors and specialty trades across the country. We review your classification, your claims history, and your mod calculation to find where the money is leaking.
We also help roofing contractors build their bonding programs - and a strong EMR is part of that picture.
Call us: (801) 505-5500
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