Wausau Glass Company Discovers Value of CWCA
Located in Wausau, WI, Rib Mountain Glass specializes in glass for commercial entrances and storefronts, construction glazing and retail glass sales. With 40 employees, the company had sales revenue in 2005 of approximately $2.5 million.
Rib Mountain Glass began working with a CWCA in 1995. Then, in 2002, the company moved its account to a direct insurance carrier at a time when rates were increasing and lower pricing seemed to be the issue for the owners.
The direct writer promised the coverage would be the same as that which was provided by the CWCA. It wasn’t. The direct writer also agreed to provide Rib Mountain Glass with a safety manual. What they received was a “generic template” from a web site that was not specific to the glass business. To use the manual, Rib Mountain had to revise it for its purposes. In addition, although the goal of moving to the direct writer was to save money, Rib Mountain was actually paying $30,000 more than it did in 2002, largely due to an increase in the Experience Modification Factor (Mod) f rom 0.66 to 1.17.
The Rib Mountain experience illustrates several important issues:
• Insurance policies that appear to be identical can be quite different. It is often difficult for insured’s, who are not familiar with coverage issues, to identify the differences.
• The value of a Certified WorkComp Advisor. A Certified WorkComp Advisor reviewed Rib Mountain’s coverage and found the direct writer’s handling of claims had not been good. Some claims that should have been cleared in a year were still open two years later. Rib Mountain’s Experience Modification Factor (Mod), which had been 0.66 in 2002 left nearly doubled from 2002 to 2004, reaching 1.17 in 2004.
Rib Mountain’s management requested a meeting in 90 days to move the account back to the CWCA’s agency. This occurred on the anniversary of the policy. The CWCA gave immediate attention to the outstanding claims and works with Rib Mountain, the insurance company adjuster and treating medical providers to reduce the outstanding claims. There are many reasons that claim costs escalate unnecessarily. Often employers do not know what to do when an injury occurs and lack a clear and definitive process to manage the injury. In addition, insurance company’s claim management is challenged by increased caseloads and reduced staffs. Medical care is often misdirected and uncoordinated. CWCA’s are trained to Help employers closely monitor the progress of injured employees so that costs do not spin out of control.
The CWCA has been able to stem the tide of Rib Mountain’s rising Mod. For 2006, the client’s Mod will be 1.11 and should continue to drop as the improperly handled claims are cleared. Says a representative of Rib Mountain Glass, “With the help of our CWCA, we are understanding WorkComp better and using their guidance we’re learning how to get our rates and costs under control.”