Large Contractor Insurance

Workers’ Compensation Insurance

Workers’ Compensation Insurance is a major expense for a large contractor. Going to my point of needing a PhD working on your insurance solutions, maybe you current agent has told you what your current experience modification is.

Have they ever sat down with and explained to you how that number was calculated? Have you ever checked to make sure it was calculated correctly? Did you even know there was something you could do about it? I guarantee your agent has never done this with you.

Workers’ Compensation Experience Rating Form

The basic Workers’ Compensation Experience Rating Form lists the Following:

• The class codes for the various types of employees you have working for you

  It is very important that these are correct. As a salesman classified under a roofing code could be costing you thousands of dollars. Also the class codes need to be reviewed themselves to make sure they accurately reflect the work the employee is performing. Again the wrong class codes listed can cost you money.

• The amount of payroll for each code

  Again this must be reviewed for accuracy to ensure the payroll is being properly classified.

• The expected loss ratio per $100 in payroll

  This means for every $100 of payroll, in this class code, other companies, on average, have experienced this amount of workers’ compensation claims.

• Expected Losses

  This is the amount of payroll multiplied the expected loss ratio.

• Actual Losses

  This is the amount of the actual losses incurred by your business.

• Claim Data

  This is the claim number from the insurance carrier and it identifies a specific case file. Specific claims will be listed individually if they are open. This information can be quite useful in identifying trouble spots. As you know the more claims you have the higher your experience modification will be.

  Let us say after review of this claim data you see one employee Homer Simpson in the warehouse has had three accidents in the last 2 years. This employee is either on a losing streak or is just plain bad news. Simpson is making $37,000 a year. He is costing you an additional $100,000 in Workers’ Compensation premiums per year. It might be time for some downsizing or at the very least additional training.

Has your current agent ever went over anything like this with you? The answer is probably not. That it is why it is time to graduate to ContractorsLiability.Com

Challenging Your Experince Modification

Captive insurance is an alternative risk financing solution for companies of medium to large size. It is a fact that 90% of the Fortune 500 companies own at least 1 captive insurance company arrangement. As a captive owner, you are basically creating your own insurance company.

Either on your own or by joining a group of similar businesses. This allows you to gain ownership and control of all aspects and costs of your insurance programs while creating the potential for significant financial gains.

3 Important Benefits of a Captive are:

• Save and Manage costs

  These include lower premiums, greater cash flow and capturing investment return.

• Increased Control

  You will be able to design policies for your specific needs, lower claim costs and management, eliminate insurance company built in policy profit. You will also gain a better understanding of how to mange risks.

• Improve your risk management

  You will reduce your overall cost of risk by partnering with like minded business owners in your industry. This allows for sharing of knowledge and experience to operate your business with greater efficiency all the while reducing losses and improving the safety of your employees and clients work environment.