The insured is an outdoor sign company with fewer than 10 employees. The company’s annual revenue is just under $2,000,000.
The company’s annual premium was extremely high based on the number of employees and the level of duties of the workers. Employees were either classified as working in the print shop or at a higher risk classification as outdoor workers hanging the signs.
CWCA’s investigated the payroll allocation of the company and uncovered a textbook example of misclassification. It was determined that the entire $80,000 in payroll was tied up in an $8 class code, which was the classification for the work being done by the higher-risk outdoor employees. This group was fewer in number than those who worked in the print shop and their duties were limited seasonally. It was discovered that only $4,000 of the payroll should have been allocated to the outdoor workers, as the company hadn’t realized for many years that they could split the payroll over two codes.
Calls were made to the insurance company and time sheets documenting the hours spent in each class code by the day for all employees were submitted. Based on this documentation, the company was able split the payroll into an $8 code for the outdoor laborers and a $3 code for those lower-risk employees working in the print shop.
As a result of the investigation, the company saw its annual premium go from $18,000 per year to $6,000 per year, saving $12,000 per year in premiums.