Case Study: Grading Contractor
A grading contractor with 42 employees carried a 1.40 experience mod because claims that had been closed for over two years were still reported as open. Correcting them brought the mod to 1.23 and saved $33,150 over 3 years.
The Numbers
Industry
Grading and excavation
Employees
42
Annual revenue
About $3 million
Broker relationship
Same broker for 21 years, no mod review ever done
Original experience mod
1.40
Corrected experience mod
1.23
First-year savings
$11,050
Savings over 3 years
$33,150
The contractor used the same insurance broker for 21 years, and in all that time no one reviewed the experience mod. Claims that had been closed for over two years still showed as open, so the carrier reported inflated reserves to the rating bureau and the mod stayed high.
The employer reviewed the mod worksheet, found the closed claims still showing as open and asked for a correction. The mod fell from 1.40 to 1.23, which saved $11,050 in the first year and $33,150 over 3 years.
This result maps to
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