Construction Case Study: How to Reduce WC Premiums to Competitively Bid on Work
Due to a high frequency of losses, a Chicagoland construction company had a large rise in workers’ compensation premiums every year. The perpetual increase got to the point where it was affecting the company’s ability to competitively bid on work. A debit Experience Modification Rating was making matters worse, as many General Contractors want to see mods below the 1.0 mark. Lastly, the lack of a plan to effectively mitigate claims was resulting in increasing reserves on the open claims.
What are the takeaways?
Implementing a quality claims and safety program is essential to understanding and mitigating your losses. By taking proactive measures to lower your Experience Mod, it’s easier to make a case to insurance carriers for lower premiums.
- Understand and Effectively Communicate Your Claims History – Assurance prepared a detailed claims summary to help the carriers understand the issues at-hand and that the risk was much better than it appeared on paper. This approach enabled us to bring a carrier partner that understood the insured’s claims experience and the level of support Assurance would provide.
- Complete Regular Claim Reviews – We worked with the client on regular claim reviews to help mitigate loss on the old claims and control any new activity. As a result of the positive performance, the insured was able to work their mod back below 1.0 and earn the Illinois Contractor Credit. This credit alone saved the insured over 30% on their annual premiums.
- Establish a Safety Committee – As part of the process, the insured established a safety committee made up of employees, management and our risk management department. By creating a safety committee that is backed by management and includes participants of all experience levels, you’ll receive proper input and the ability to take action quickly. An established safety committee can also help companies stay on top of safety trends and implement changes ahead of the competition.
What was the result?
- 30% savings on annual premiums
- Mod below 1.0 for six straight years
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