Claims Investigation Brings Client’s Mod to an All-Time Low

INSURED – The insured is a contract hauler that services major building supply companies and contractor equipment dealers in 11 states. Annual gross revenues are in excess of $6,000,000.

SITUATION – The company’s Workers’ Compensation premium was $140,000 and the Experience Mod was .96, predominantly a result of claims in two states.

ASSESSMENT – CWCAs reviewed the company’s operations for state and federal filings and to make sure the coverage was proper. Then they reviewed the Experience Mod worksheet. Careful analysis revealed a number of claims still open, dating back six years with no activity.

SOLUTION – With help from a private investigator, it was learned that two of the claims were fraudulent and quickly closed without payment. Two previous claims, which had excessively high reserves, were amended to less than a quarter of the original. And one remaining claim is pending in litigation, though it is expected to settle for a fraction of the original estimate.

RESULT – By managing the claims properly, the CWC was able to reduce the company’s expiring annual premium from $140,000 to $90,000, and the Experience Modification Factor from .96 to an all-time low of .67.