How Your ERM Score Directly Affects Your Insurance Premiums
Quick Answer
Your Amazon ERM (Employer Risk Management) score directly impacts your commercial auto insurance premiums. DSPs with ERM scores above 800 can qualify for 10-15% discounts, while scores below 600 may face 20-35% surcharges. Some carriers won't quote DSPs with scores below 500.
In This Guide
1. What is ERM and Why Does It Matter?
ERM stands for Employer Risk Management, Amazon's proprietary scoring system that evaluates the safety and performance of Delivery Service Partners. Think of it as a credit score for your delivery operation.
Amazon calculates your ERM score based on several factors including delivery completion rates, safety incidents, customer feedback, and compliance with Amazon's operational standards. This score ranges from approximately 400 to 900, with higher scores indicating better performance.
Why insurance carriers care: Your ERM score is a direct indicator of risk. A DSP with a high ERM score is statistically less likely to have accidents, workers comp claims, and liability incidents. Carriers use this data to price your policies accordingly.
2. ERM Score Tiers and Insurance Impact
Here's how your ERM score typically affects your commercial auto insurance premiums:
| ERM Score | Tier | Rate Impact | Carrier Access |
|---|---|---|---|
| 850+ | Fantastic Plus | -15% discount | All preferred carriers |
| 800-849 | Fantastic | -10% discount | Most preferred carriers |
| 750-799 | Great | -5% discount | Standard carriers |
| 700-749 | Good | Base rate | Standard carriers |
| 650-699 | Fair | +10% surcharge | Limited options |
| 600-649 | At Risk | +20% surcharge | Specialty carriers only |
| <600 | Critical | +35% surcharge | Very limited; may decline |
Real-world example: A DSP with 50 vehicles and a base premium of $450,000 could save $67,500 annually by improving from "Good" (700) to "Fantastic Plus" (850+).
3. How Carriers Use Your ERM Data
When you apply for commercial auto insurance, carriers can request your ERM data from Amazon (with your permission). They look at several key metrics:
- Current ERM Score: Your overall rating at the time of application
- Score Trend: Whether your score is improving or declining
- Safety Incidents: Number and severity of incidents in the past 12-24 months
- DNAR Rate: Delivery Not Attempted Rate (indicates operational efficiency)
- Customer Feedback: Complaint frequency and resolution
Carriers with DSP expertise weight these factors differently. Some prioritize safety incidents, while others focus more on overall score. Working with an agent who understands these nuances can help you find the best carrier for your specific situation.
4. What Factors Affect Your ERM Score
Amazon calculates your ERM score based on several weighted factors:
Packages delivered on first attempt
Accidents, injuries, violations
Compliance with proof of delivery
Ratings and complaints
Delivery Not Attempted percentage
Driver safety app scores
5. How to Improve Your ERM Score
Improving your ERM score takes consistent effort, but the insurance savings make it worthwhile:
1. Focus on Safety First
- Hold weekly safety meetings (document them)
- Review dash cam footage regularly
- Enforce seatbelt compliance strictly
- Create accountability for preventable accidents
2. Reduce DNAR Rate
- Train drivers on proper address verification
- Brief drivers on known difficult addresses
- Establish protocols for access-restricted locations
- Communicate with customers proactively
3. Maximize Photo Compliance
- Set daily targets for photo on delivery
- Include in driver scorecards
- Reward high compliance rates
4. Handle Customer Feedback
- Respond to complaints within 24 hours
- Coach drivers on professional conduct
- Provide uniforms and professional appearance standards
6. Getting the Best Rates for Your Tier
Regardless of your current ERM score, there are ways to optimize your insurance costs:
- Work with DSP specialists: Agents who understand ERM can match you with the right carriers for your tier
- Document your safety program: Written policies and training records can offset a lower score
- Consider higher deductibles: Trading premium savings for higher out-of-pocket on claims
- Bundle coverages: GL, WC, and auto with one carrier often yields discounts
- Shop annually: As your ERM improves, new carriers become available
See Your Rate Impact
Use our free ERM Calculator to see exactly how your score affects your premiums and get personalized improvement recommendations.
Zachary J. Kramer
Licensed Insurance Agent | NPN 7570201
20+ years of insurance industry experience. Specializes in commercial auto and transportation insurance for delivery fleets across MO, KS, TX, OK, IA, and CO.