ModWatch

Idea

ModWatch turns your annual workers' comp Experience Rating worksheet into an instant overcharge check, then hands you a ready-to-file dispute packet instead of a 30 to 50 percent contingency bill. Every year, insurers and state rating bureaus issue an Experience Modification worksheet that sets a business's workers' comp premium multiplier for the next three years, and about 30 percent of these worksheets contain a clerical error. Today the only way most small and mid-size employers find out is by hiring a contingency-fee recovery firm that takes a third to half of whatever it recovers, months after the fact. ModWatch uploads the worksheet, re-derives the calculation, flags the specific line items worth disputing, and generates the packet the owner can file directly, for a flat annual subscription.

Market gap

Workers' comp Experience Modification (e-mod) is a black box to most small business owners. It is calculated once a year from a formula (classification codes, payroll, and prior claims) that almost nobody outside an insurance actuary understands, and it silently multiplies the premium up or down for three years running. Two facts define the gap: about 30 percent of mod worksheets carry a clerical error, and roughly 25 to 50 percent of business owners have been overcharged at some point, per industry sources. The only players who currently catch these errors are a cottage industry of contingency-fee human audit firms (Comp Recover, 3929 Partners, CutComp, ACU Solutions, OneGroup) that charge a large cut of any recovery and only engage case by case, usually after a business already suspects a problem. The one software product in this space, Mod Advisor, is sold to brokers and carriers as an analytics tool, not to the employer directly. Nobody sells the business owner a standing, self-serve subscription that checks the worksheet every single year the moment it arrives, before the narrow dispute window closes. Timing matters because NCCI has been actively updating its Experience Rating Plan methodology, and rate volatility plus tighter underwriting since 2024 to 2026 has made mod swings more consequential for bid competitiveness in construction, trucking, and manufacturing right when scrutiny of the worksheet math is rising.

Total Addressable Market (TAM)

Bottom-up, from published industry figures:

• Total US workers' compensation net written premium in 2025 was $45.6 billion (NCCI 2026 State of the Line Guide, via Insurance Journal).
• NCCI's experience rating eligibility threshold is roughly $18,000 to $18,500 in average annual premium (NCCI, "ABCs of Experience Rating"). Below that, a business is manually rated at a flat 1.00 mod and has nothing to check.
• Assumption: experience-rated employers are larger accounts and hold a disproportionate share of premium dollars. Using a conservative 65 percent share of total premium, that is about $29.6 billion sitting with experience-rated employers.
• Assumption: average annual premium per experience-rated employer is about $35,000 (a mid-size contractor, manufacturer, or trucking fleet in a moderate-to-high hazard class). That implies roughly 845,000 experience-rated employers nationally. Rounded: ~800,000 employers is the TAM count.
• TAM = 800,000 employers x $1,800 average annual subscription (Starter/Growth blend) = ~$1.44 billion.
• SAM: restrict to the higher-hazard, higher-scrutiny industries where a mod swing changes whether a bid is competitive (construction, manufacturing, trucking and transportation, healthcare staffing), estimated at 40 percent of the experience-rated population: 320,000 employers x $1,800 = ~$576 million.
• SOM: a realistic 3-year self-serve capture through the free checker funnel, 0.5 percent of SAM: 1,600 customers x $1,800 = ~$2.9 million ARR.

Monetization strategy

Freemium SaaS subscription, billed to the employer directly, not to a broker or carrier. The free checker tool captures leads year-round, not just in the narrow post-audit dispute window, by giving an instant read on whether this year's worksheet is worth a closer look. Paid tiers unlock the full recomputation, the classification code audit, renewal monitoring, and the exportable dispute packet. The business keeps paying every renewal cycle because a new worksheet, and a new chance at an error, arrives every year, and multi-location employers need it across every state and location on an ongoing basis.

Pricing strategy

• Free: E-Mod Overcharge Checker. One worksheet upload, instant flagged-error count and an estimated dollar range at risk. Email required to receive the PDF summary. This is the entry point.
• Starter, $89 per month ($1,068 per year). Single location, full worksheet recomputation, classification code check against actual job duties, renewal monitoring alerts.
• Growth, $249 per month ($2,988 per year), the anchor. Multi-location and multi-state support, generated dispute packet ready to file with the carrier or rating bureau, payroll audit prep checklist, shareable broker view.
• Optional Recovery Assist add-on: a capped 10 percent success fee (max $2,500 per dispute) for customers who want a licensed partner to file on their behalf, positioned directly against the 30 to 50 percent cut charged by contingency firms like Comp Recover and 3929 Partners.

Lead magnet

The free E-Mod Overcharge Checker: upload the one-page Experience Rating worksheet your carrier or state bureau sends every year, no signup required for the first scan, and get back an instant flagged-error count with an estimated dollar range at risk. Email capture unlocks the full PDF summary. It proves value in under two minutes, using a document the owner already has sitting in a folder somewhere.

Competitors

• Mod Advisor (modadvisor.com): an AI-driven experience mod analysis tool, but sold to brokers and carriers as a book-of-business analytics dashboard, not to the employer as a self-serve product.
• Comp Recover (comprecover.com): contingency-fee human audit and recovery firm. No software product; manual case review; paid only out of whatever it recovers.
• 3929 Partners (3929partners.com): same contingency-based model, manual engagement, workers' comp audit disputes and overpayment recovery.
• CutComp (cutcomp.com): workers' comp audit help and dispute consulting, publishes educational content but sells advisory engagements, not a subscription tool.
• General insurance brokers (Alera Group, USI, The Coyle Group, Akker Insurance): publish e-mod education as a value-add for existing client relationships, but offer no dedicated always-on monitoring tool and no packaged dispute generation, it is ad hoc advisory tied to the broker relationship.

What competitors offer now

The market splits into two camps and both miss the employer as a direct self-serve customer. Broker and carrier-facing analytics like Mod Advisor require the business to already be a client of a broker or carrier that has licensed the tool, and it produces insight, not a filed dispute. The contingency-fee firms (Comp Recover, 3929 Partners, CutComp, ACU Solutions, OneGroup) take a 30 to 50 percent cut of any refund found, work case by case after an audit has already closed, and require the business to hand documents to a human analyst with a multi-week turnaround. None of them check every worksheet automatically, every year, the moment it is issued, and none generate a filing-ready packet the owner can submit without giving up a third of the recovery.

What can be done differently to attract customers

Position directly against the contingency-fee cut, not against the broker relationship. The free checker tool works on a worksheet the owner already has, any time of year, not just inside the narrow post-audit dispute window the contingency firms wait for. That means ModWatch can capture the lead months before a competitor firm would even start a conversation. The pitch to a contractor or fleet owner is blunt: pay a flat few hundred dollars a year and keep 100 percent of what you recover, instead of handing 30 to 50 percent to a recovery firm, and get checked automatically every renewal instead of only when a firm happens to take your case.