Implementation of comprehensive
Workers’ Comp program helps bus company drive down premiums
Insured
A school bus contractor with 30 drivers.
Situation
The company was enrolled in a special state program for school bus operators
that allowed it to receive a safety group dividend and preferred pricing
on their Workers’ Compensation rates. Although the bus company didn’t
file many claims, there were two or three claims--the result of accidents--that
were spiraling out of control. As a result, its Experience Mod jumped from
1.079 in 2004 to 1.782 in 2007. With this increase combined with the insurance
carrier’s debited surcharge due to the poor claims experience, the
company was paying a 240% surcharge. Ultimately, its Workers’ Compensation
coverage was dropped from the carrier’s program.
Assessment
Certified WorkComp Advisors (CWCAs) reviewed the loss-runs claims report
from the carrier and found three claims that were incorrect. The claims
had not been closely monitored and no one at the company had kept in touch
with the carrier. Thus, a breakdown in communication between the employer,
physician and adjuster was creating an unnecessary cost for the company.
Solution
The CWCAs took over as the company’s Workers’ Compensation agent
and immediately began a thorough review of the existing claims and implemented
a plan for filing future claims. They then instituted a light duty return-to-work
program and had employees attend a safety seminar that focused on accident
prevention and how accident claims can affect the employer’s profit
and, ultimately, each employee’s paycheck.
The CWCAs also put in place a physicians’ panel to deal with new claims
and had the employer implement hiring tools to avoid hiring potential claims.
Recognizing that these steps will control claims, the CWCAs outlined them
into a business plan and submitted the plan to the carrier. The result was
an immediate savings for the company since the carrier applied a 15% credit
to the policy premium.
Result
Through their efforts, the CWCAs were able to reduce the company’s
annual premiums from $80,000 to $65,000, while projecting that the Experience
Mod will decline by 25% over the next two years. |