Case Study: CWCA investigation
brings client's Mod to an all-time low
Insured
A contract hauler with annual gross revenues in excess of $6,000,000 that
services major building supply companies and contractor equipment dealers
in 11 states.
Situation
The company’s Workers' Compensation premium was $140,000 and the Experience
Mod was .96, predominantly a result of claims in two states.
Assessment
CWCAs reviewed the company’s operations for state and federal filings
and to make sure the coverage was proper. Then they reviewed the Experience
Mod worksheet. Careful analysis revealed a number of claims still open,
dating back six years with no activity.
Solution
With help from a private investigator, it was learned that two of the claims
were fraudulent and quickly closed without payment. Two previous claims,
which had excessively high reserves, were amended to less than a quarter
of the original. And one remaining claim is pending in litigation, though
it is expected to settle for a fraction of the original estimate.
Result
By managing the claims properly, the CWCAs were able to reduce the company’s
expiring annual premium from $140,000 to $90,000, and the Experience Modification
Factor from .96 to an all-time low of .67. |