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. Strong scores widen the set of carriers willing to quote you and support better pricing; weak scores narrow your options. No carrier publishes a fixed discount per tier, so the only reliable number is a real quote.
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
Carriers don't publish a discount or surcharge per scorecard tier; each one prices your account from its own underwriting. What changes with your standing is how many carriers will look at you and how hard you have to work to prove the risk:
| Scorecard standing | What it usually means for your insurance |
|---|---|
| Fantastic / Fantastic Plus | The widest choice of carriers, and evidence you can use to negotiate. |
| Great | Standard DSP markets; loss history decides most of the price. |
| Fair | Fewer carriers; expect questions about your safety program and recent incidents. |
| Poor | Specialty markets only, and some carriers may decline until the trend improves. |
Your loss runs, fleet and drivers still drive most of the premium. A licensed agent can tell you what your account would actually cost with the carriers that write DSPs.
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
Get a Free Scorecard Review
Tell us about your operation and a licensed agent will review it and get you actual quotes from carriers that write DSPs.
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.