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Review of Experience Mod saves over $25,000

A family-owned building contractor located in central California with 15 employees that did $2,000,000 in business in 2004. The contracting company is one of several businesses owned by individual members of the same family.

Experience Modification Factor jumped, for no obvious reason, from 0.99 for 2004-05 to 1.27 for the current year. The insured decided it was time to re-evaluate his WorkComp policy.

After speaking with the insured to obtain a better understanding of the operation, a Certified WorkComp Advisor (CWCA) performed a basic review and developed a projected Experience Modification Factor. He then compared the contractor’s 2005-2006 Experience Modification worksheet from the Workers Compensation Insurance Rating Bureau (WCIRB) to his projection. The comparison revealed a startling discrepancy.

After examining the discrepancy, it was determined that the WCIRB had been co-mingling statistical data from a company owned by another family member with that of the building contractor. Correspondence was initiated with the WCIRB identifying the separate and non-combinable ownership of the companies and offering the CWCA’s projections of what the corrected experience modifications should be.

The WCIRB agreed with the CWCA’s findings. It adjusted the contractor’s Experience Modification Factor for 2005-06 from 1.27 to .87, which resulted in the employer saving $9,343 on its WorkComp premium. It was also discovered that the Board had made the same error in the previous year, so it also retroactively adjusted the 2004-05 Experience Modification Factor from .99 to .85, which resulted in another savings of $15,689. The total WorkComp premium savings for the insured came to $25,032.