Review of Experience Modification Factor saves insured over $25,000

INSURED

A company, with 15 employees, reports $2 million in sales and is one of several businesses owned by various members of the same family.

SITUATION

The employer’s Experience Modification jumped, for no obvious reason, from 0.99 to 1.27. The insured decided it was time to re-evaluate the company’s Work Comp policy.

ASSESSMENT

After speaking with the insured to obtain a better understanding of the operation, the CWCA performed a basic review and developed a projected Mod. He then compared the contractor’s Experience Modification worksheet from the Workers’ Compensation Insurance Rating Bureau (WCIRB) to his projection. The comparison revealed a startling discrepancy.

SOLUTION

After examining the discrepancy, it was determined that the Rating Bureau had been co-mingling statistical data from a company owned by another family member with that of this company. Correspondence was initiated with the Bureau identifying the separate and non-combinable ownership of the companies and offering projections of what the corrected experience should be.

RESULT

The Bureau agreed with the CWCA’s findings. It adjusted the company’s Mod for from 1.27 to .87, which resulted in a savings of $9,343 on the employer’s Workers’ Comp premium. It was also discovered that the Board had made the same error in the previous year, so it also retroactively adjusted the Experience Modification Factor from .99 to .85, which resulted in an additional savings of $15,689. The total Work Comp premium savings for the insured came to $25,032.