How Your X-Mod Impacts Your Brewery’s Workers’ Comp Insurance

Workers’ compensation exists to protect workers. Most states require companies to cover employees with workers’ comp. In California, for instance, even a business with only one employee must carry workers’ comp.

Workers’ compensation insurance can also be a big expenditure for your brewery. That’s where your experience modification — often called an “X-mod” — comes into play.

What is an X-Mod?

Your X-mod compares your brewery’s compensation claims experience to other businesses of similar size in the same industry. It helps tailor the cost of workers’ comp to the characteristics of specific businesses. More importantly, it gives a business the opportunity to manage its own costs.

The actual process of calculating the experience mod is complex. Here’s what you need to know: your brewery’s actual losses are compared to its expected losses by industry type. Factors include company size, unexpected large losses, and the difference between loss frequency and loss severity.

Your X-mod represents either a credit or debit to your workers’ compensation premium. A mod of 1.0 is the industry average. A factor greater than 1.0 means you have greater losses than expected; your premium will go up. On the other hand, a factor lower than 1.0 means you have lower losses than expected, resulting in a premium discount.

How to Improve Your X-Mod

“The X-mod can be a big concern to business owners—and rightfully so,” said Kristian Beall, AAI, of Beall Brewery Insurance. “But the simple fact is, you can take steps to lower your brewery’s X-mod. At Beall Brewery Insurance we know that firsthand: we’ve worked with many breweries to help them do exactly that.”

In other words, these breweries enjoy powerful savings on their workers’ comp premiums. So how can you lower your brewery’s X-mod — and your work comp costs? These tips should help:

• Work closely with your brewery insurance agent. “An experienced brewery insurance professional can help you lower your workers’ comp payments by improving safety in ways you may not have considered,” points out Richard Beall, principal of Beall Brewery Insurance. “Additionally, your agent can also ensure you pay the right rate to begin with. It’s possible that, due to incomplete or incorrect information, your workers’ comp premiums were not calculated correctly from the start.”
• Create a sound safety program from the ground up. Great employee safety starts with hiring great employees in the first place. Your staff must understand their responsibilities and your expectations — and be held accountable. And, it should go without saying, you and the rest of your brewery’s leadership should set a great example, and be responsive to safety issues when they come to your attention.
• Create or improve an effective return-to-work program. Your program should provide injured employees with transitional work, as they recover from the incident — and you should focus on keeping the employee engaged with the brewery during this time.
• Report injuries promptly. Studies show that prompt injury reporting reduces the cost of claims. Be sure you share with your carrier any inconsistencies about the incident, and that you promptly manage any machinery or equipment involved in the incident.

“Injuries are nothing unusual in the craft beer industry, and work comp costs are a concern to all business-owners,” points out Kristian Beall. “But what many business owners don’t understand is that they can take action to prevent injury and manage costs — all to the betterment of the business itself.”

Beall Brewery Insurance is a nationwide leader in serving the craft beer industry — providing craft breweries the knowledge and expertise to protect their business, their workers, and their brews… for less.