Case Study: How We Cut a Roofing Company’s Workers’ Comp Costs by $100,000
A high-risk industry doesn’t have to mean high insurance premiums. This commercial roofing company, with over 200 employees, was paying far too much for its workers’ compensation insurance and was at risk of losing major contracts.
Workers Comp Program: Key Insights for Workers’ Comp Success
Understanding workers comp program is essential for anyone navigating workers’ compensation. Whether you are an employer managing premium costs or an insurance agent serving clients, mastering 198 workers comp program gives you a decisive advantage—helping you avoid costly mistakes and deliver better outcomes in the workers’ comp system.
Here is how we identified the problems and implemented a system that saved them $100,000 in one year.
The Situation: An Experience Mod That Was Killing Business
The company’s Experience Modification Factor, or “Mod,” had hit 1.0.
Think of your Mod as a credit score for your business’s safety record. A 1.0 is the industry average. Anything higher means you’re paying a penalty on top of your premium. Anything lower means you’re earning a discount.
While 1.0 might seem acceptable, it’s a red flag in the construction world. General contractors often refuse to hire subcontractors with a Mod of 1.0 or higher because it signals an unsafe or poorly managed operation. This company wasn’t just overpaying for insurance; it was being shut out of valuable projects.
The Diagnosis: Four Critical Failures
A deep dive into their program revealed four core problems that were driving up costs and inflating their Mod:
- Mismanaged Claims: We found old, unresolved injury claims from years prior. Two claims alone—a hand injury and a knee injury—were still open and holding over $100,000 in reserves against the company’s record.
- Improper Medical Care: Injured employees were being sent to general doctors, not specialists trained in occupational medicine. This often leads to slower recovery times and higher medical costs.
- No Safety Program: The company lacked a formal, documented safety program. Safety was an afterthought, not a core part of their culture.
- No Return-to-Work Policy: When an employee was injured, there was no plan to bring them back to work in a limited or modified capacity. This kept them at home longer, which dramatically increases the cost of a claim.
The Solution: A Three-Part Strategic Plan
We replaced their reactive approach with a proactive workers’ comp management system. The plan was direct and targeted the failures we uncovered.
- Control Medical Treatment. We established a dedicated network of occupational health doctors who specialize in workplace injuries. These physicians understand the goal is to provide excellent care that gets employees healthy and back to work safely and quickly.
- Overhaul Safety and Hiring. We worked directly with management to build a new safety program from the ground up. This included rewriting their safety manual and training supervisors on how to enforce new hiring and safety protocols effectively.
- Implement a Return-to-Work Program. We created a formal policy to bring injured employees back to transitional duty as soon as they were medically able. This single step is one of the most effective ways to reduce claim costs and lower your Mod.
By executing this plan, we were able to work with the insurer to close out the old, costly claims that were damaging their record.
The Result: A $100,000 Payoff and a Competitive Edge
The results were immediate and dramatic. In less than one year, the company saw a complete turnaround.
- Experience Mod: Dropped from 1.0 to 0.49. This transformed them from an average-risk company to one of the safest in their industry, giving them a significant competitive advantage.
- Annual Premium: Decreased from $300,000 to $200,000.
- Bottom-Line Savings: $100,000 per year.
Most importantly, the company was no longer at risk of being turned away from projects. With a best-in-class Mod of 0.49, they became a preferred partner for the very same general contractors who would have previously passed them over.
Agents can sharpen their edge with the IWCP workers’ comp sales tools—resources built to help agents write more business and deliver better outcomes.
Employers can learn the fundamentals at Locked and Loaded Training, designed specifically for employers navigating workers’ comp.