Case Study: Outdoor Sign Company
An outdoor sign company with fewer than 10 employees was placed in the highest risk class available and paid $18,000 a year for work it did not do. Moving to the correct class cut the premium to $6,000, a saving of $12,000 every year.
The Numbers
Industry
Outdoor signage
Employees
Fewer than 10
Original annual premium
$18,000
Corrected annual premium
$6,000
Annual savings
$12,000
Savings over 3 years
$36,000
The company trusted its agent to get the classification right. Instead it was placed in a high-risk construction code even though its work was far less hazardous, and it paid a premium penalty for operations it did not perform.
The employer learned how class codes work and asked for the correction. The insurer won't fix a misclassification unless you ask, so the employer moved out of the high-risk class and onto its correct, lower rate. That is $12,000 a year, or $36,000 over 3 years.
This result maps to
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