Taking the creative route
to save a contract
It’s a well-known fact that a company’s Experience
Mod has an effect on its bottom line because of the additional Workers’
Comp costs that result from it. However, sometimes a high Experience Mod
can also directly affect how you do business.
A HVAC parts and service company was in danger of losing its largest account.
In the interest of promoting on-site job safety, the customer, one of the
country’s largest paper manufacturers, had established a policy that
it would not do business with any vendor whose Experience Mod was greater
than 1.0.
Since the HVAC parts and service company could ill afford to lose their
largest customer, they turned to a Certified WorkComp Advisor (CWCA) for
assistance. In evaluating the situation, the CWCA found that the paper company
only did business with the HVAC Company’s Service Department. Therefore,
she broke apart the Experience Mod by departments such as electrical, residential,
plumbing and service and was able to show how each department affected the
Mod and what the Mod would be for each department individually.
This revealed that much of the basis for the Mod was from the company’s
Residential Plumbing division, not the industrial service division that
did business with the paper company. In fact, the Service Department did
not have a single claim that contributed to the Mod, which means as a stand-alone
company that department would have an Experience Mod well below 1.0.
The department’s sub-1.0 Experience Mod satisfied the paper manufacturer
and enabled the HVAC Company to keep the contract. It also inspired the
HVAC Company to bring in the CWCA to teach all of his employees about their
roles in controlling Workers’ Compensation costs. |