7 Secrets that Cost Your Client a Bundle on their Workers' Comp

Implementation of comprehensive Workers’ Comp program saves auto dealer $2 million in first year



4 years, 7 months ago

INSURED

This chain of full-service automobile dealerships employs more than 500 people divided into three work classes – dealer, auto sales people and clerical. The company does more than $250 million in business.


SITUATION

The frequency and severity of claims being incurred by the employer were staggering. It had experienced more than 100 claims for each of the previous three years. The costs of those claims averaged more than $700,000 per year and the most recent year they topped $900,000. These numbers had already driven up the employer’s Experience Mod to 1.3 – more than twice the minimum level of 0.65– and were about to push up the mod for the coming renewal year by another 10%.


ASSESSMENT

Certified WorkComp Advisors (CWCAs) reviewed the business prior to the employer’s latest renewal. They found much disarray in its personnel plans and some aspects – such as defined return-to-work or injury-reporting systems – were non-existent. Furthermore, the employer relied upon the carrier to provide on-the-job safety plans, which amounted to employing an outside safety consultant that partially implemented OSHA regulations, but not much more.


SOLUTION

The CWCAs partnered with safety group to put a business plan together that included, among other things, detailed procedures for reporting injuries, specifications for where the employees should go for initial medical evaluations and identified “light duty” jobs. The plan also included a very comprehensive safety program.


RESULT

Because the plan showed the promise of significantly decreased claim frequency, the carrier agreed to work with the employer and decreased the renewal offer by $950,000. In the first year, the number of claims dropped nearly 70% to only 38, causing the overall cost of claims to plummet to $128,000. And in the first eight months of the second year, 12 claims were filed with no lost workdays – a first for any eight-month period for this employer. The employer’s Experience Mod has also dropped by 25% and this year’s premium dropped by over $800,000. In all, the total savings realized by the employer to date has topped $2 million.