Crunching Numbers Before You Bid
Construction Insurance – Value of a Test Experience Mod
These days, everything is measured from the amount of storage on your cell phone to the profit left in a large project started over two years ago. We measure things to help us make good decisions in the future – decisions that will hopefully be profitable.
When measuring or predicting, we often guess or use any available information to come to a “safe” conclusion. This is done with bidding work, investing money, hiring construction workers and maybe even buying equipment. Unfortunately, some of these decisions do not work out. We realize more often than not that if we would have had more information at the beginning, the outcome would have been more favorable.
When we have a lot of information and are able to predict things accurately, we are more confident to make decisions that will impact our future. So when it comes the most critical part of your business, bidding, why not be as accurate as possible? We cannot help you with predicting future material costs or labor rates, but we can predict an accurate experience modification rating that can be used for bidding future work.
Most construction companies have run into a bid that went out and then the job was delayed or put on hold. Six months to a year goes by and the owner is now ready to build, but it’s using your old bid. Things change quickly in construction, including labor rates, material and – yes – even insurance rates.
All construction companies are “measured” by their experience modification rating. A 1.00 is average with anything above being below average and anything below 1.00 above average. The experience modification “number” is a multiplier used in the calculation of your workers’ compensation premium. Wouldn’t it be helpful to have that information when bidding a job that may not start in nine months?
With some simple information including audited payrolls, valued loss runs, as well as wrap up project policy terms, losses and payrolls, we can take some of the guess work out of “what are my insurance costs going to be?” Having a “projected” experience modification rating available to use in bidding will take some of the guess work out and put more profit in. We look forward to helping your company minimize risk and maximize health.
- Construction White Paper: Workers’ Compensation and Your Loss Rating
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- Back to Basics: Workers’ Compensation Seminar (7/30)
- Deep Dive: Workers’ Compensation Seminar (8/6)
- Bottom Line Impact: Workers’ Compensation Seminar (9/16)
- OSHA 10-Hour Construction Training (10/13)
- Incident and DART Rate Calculator
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