Understanding EMR Safety Ratings: What They Mean, Why They Matter

In construction, safety is more than a box to check—it’s a culture, a commitment, and a major factor in winning work. At Phoenix General Contractors, we’ve learned that clients aren’t just evaluating what we can build; they’re evaluating how safely we build it. That’s where your EMR, or Experience Modification Rate, comes into play.

If you’ve ever seen EMR referenced in a solicitation or prequalification packet and wondered how much weight it really carries—the answer is: a lot. Your EMR safety rating isn’t just a number on your insurance paperwork. It’s a direct reflection of your company’s safety record, your jobsite practices, and ultimately, your risk as a contractor.

Let’s break down what EMR is, how it works, and why it’s something every construction company—especially in the government space—should take seriously.

What Is an EMR Safety Rating?

EMR stands for Experience Modification Rate. It’s a number used by insurance providers to calculate your workers’ compensation premiums. But more than that, it’s a benchmark of your company’s safety performance compared to others in your industry.

A rating of 1.0 is considered the industry average. Anything below 1.0 means your safety performance is better than average. Anything above 1.0 suggests you’ve had more incidents, claims, or costly injuries than your peers.

For example:

- An EMR of 0.85 means your company is 15% safer than average—and may receive lower insurance premiums.

- An EMR of 1.25 means your company is 25% more risky than average—and may be paying significantly more for workers' comp.

But it’s not just about money. On many public-sector bids, especially with agencies like the U.S. Army Corps of Engineers or the Department of Homeland Security, a high EMR can disqualify you from competing altogether.

How EMR Is Calculated

The EMR is calculated using a formula developed by the National Council on Compensation Insurance (NCCI) or state-specific rating bureaus. The formula considers:

- Your company’s actual past losses (i.e., workers’ comp claims)

- Expected losses for a company of your size and industry

- Payroll size (to normalize based on company scale)

- Frequency and severity of claims

It’s typically based on the past three years of data, excluding the current policy year. So if you’ve had a few rough years, your EMR will reflect that for a while—even if you’ve since improved your safety protocols.

Quick Tip: EMR is not just influenced by how many accidents you’ve had, but also how expensive those claims were. One major injury can impact your rating significantly more than several minor ones.

Why EMR Ratings Matter in Government Contracting

In the world of federal and municipal contracting, risk is everything. Agencies aren’t just looking for low bids—they’re looking for low risk. And a high EMR is a red flag.

Here’s how your EMR can impact your ability to win work:

1. Prequalification – Many solicitations or RFPs include a requirement like: “Contractor must have an EMR of 1.0 or lower.” If your EMR is too high, you may not even be considered.

2. Competitive Advantage – An EMR below 1.0 signals strong safety culture. In tight competitions, that confidence in your safety record can tip the scales.

3. Bonding and Insurance – Surety providers and insurers look at EMR when determining bonding capacity and premium rates. A strong EMR can reduce costs and open more doors.

What’s a 'Good' EMR in Construction?

In general:

- Below 1.0: Excellent—shows strong safety culture

- 1.0: Average—industry standard

- 1.1 to 1.25: Acceptable, but may raise concerns

- Above 1.25: Risky—may disqualify you or raise premiums

- Above 1.5: Likely to block you from federal and municipal projects

At Phoenix General Contractors, we maintain an EMR well below 1.0. Not just to stay competitive—but because we believe our people deserve to go home safely, every day.

How to Improve Your EMR

If your EMR is higher than you'd like, the good news is: you can bring it down. But it takes time and deliberate effort. Here’s where to start:

- Conduct a Safety Audit – Identify weak points in your training, reporting, and hazard response.

- Implement a Safety Management System – Daily safety briefings, toolbox talks, site inspections.

- Train and Re-train – Focus on fall protection, PPE compliance, and equipment handling.

- Report and Track Near-Misses – A strong reporting culture helps stop incidents before they escalate.

- Work with Your Insurance Provider – Many carriers offer risk management support and training tools.

EMR as a Marketing Tool

Your EMR isn’t just an internal metric—it’s a marketing asset. Include it on your capabilities statement, highlight it in your proposals, and mention it in capabilities briefings. Contracting Officers don’t want headaches. Show them your track record, and you give them peace of mind.

Final Thoughts

In an industry built on precision and accountability, your safety record speaks volumes. And your EMR? It’s the number that backs it up.

Whether you're pursuing federal IDIQ contracts, emergency response work, or municipal infrastructure upgrades, a strong EMR is more than a box checked—it’s a competitive edge. It shows that your company isn’t just capable, it’s careful. And in government contracting, that distinction matters.

At Phoenix General Contractors, we believe every safe project is a successful one—and every successful one starts with a crew that knows what’s at stake. That’s why we don’t just measure performance in square footage or contract value—we measure it in zero-incident days and a low EMR that proves we walk the talk.