Implementation of comprehensive
Workers’ Comp program saves auto dealer $2 million in first year
Insured
The chain of full-service automobile dealerships employs more than 500 people
divided into three work classes – dealer, auto sales people and clerical.
The company did more than $250 million in business in 2005.
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 was 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 in concert with a risk management team put a business plan together
that included, among other things, detailed procedures for reporting injuries,
specifications to whom the employees should go for initial medical evaluations
and identification of “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
for last year by $950,000. In the first year, the number of claims dropped
nearly 70% to only 38 with the overall cost of claims plummeting to $128,000.
And in the first eight months of the second year, 12 claims have been filed
with no lost workdays – a first for any eight-month period for this
employer. The employer’s Experience Mod for this year 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. |