General
contractor enjoys a Workers' Comp drop of $245,302 in just
four years
Insured
A commercial general contractor with 110 employees and revenue of $52 million
in 2006 and 150 employees and revenue of $75 million in 2008.
Situation
A 62% Workers' Comp surcharge drove up the company's Experience Modification
Factor to 1.12, costing them an additional premium of $185,000 per year. It also
restricted the company from bidding work for large corporations that required
a 1.00 or lower Experience Mod.
Assessment
The CWCA’s review of the 2004-2005 Experience Mod work sheet, along with
the loss data from the previous four years and the OSHA logs, revealed that the
number and severity of claims was much higher than expected.
Solution
The CWCAs showed the general contractor how they were paying the insurance company
$3 for every $1 paid in claims. The contractor accepted an aggressive rehab plan
of action that included the installation of a safety committee and improved training
and record keeping. The CWCAs provided administrative support for the company
by running the Workers' Comp process and training the safety coordinator.
In addition, the CWCAs worked with the client in establishing a relationship
with an Occupational Medical Center, initiating a claim reporting system and
a return-to-work process. The CWCAs also assisted the contractor in completing
necessary job descriptions, and initiating a wellness process that has resulted
in lowering the company's healthcare costs and increasing employee productivity.
Result
The Experience Mod went down from 1.12 to 1.03, with a projected 2007-2008 Mod
of .95. The 2008-2009 mod is .69. Because of the radical reduction in the number
and size of Workers' Comp claims, additional discounts were negotiated, lowering
the premium cost from $430,302 in 2004 to $394,000 in 2005, $365,318 in 2006,
$303,000 in 2007 and $185,000 in 2008.
The company uses its low Experience Mod and excellent safety record to beat their
competition for work.
