Risk & Business Magazine Moody Insurance Spring 2017 | Page 25

Are You Losing Bids Because Of
Workers’ Compensation Losses?
I
t’s no secret that competitive bids can
become challenging when workers’
compensation rates skyrocket
because of claims experience.
Loss trends for certain classes
of contractors will continue to rise if
contractors pay minimal attention to loss
control and safety issues. Here are a few
classes that stand out from the crowd:
EXCAVATION/GRADING
Excavators are witnessing an increase in job-
related injuries and deaths as the industry
employs more heavy equipment and less
manual manpower at job sites. The US
Department of Labor notes 23 excavation-
related fatalities in 2016, with the majority
related to excavation equipment and a lack
of compliance with OSHA construction
standards. The risks for this class should be
fairly obvious since workers are exposed to
heavy lifting, working underground, and
the use of dangerous heavy equipment.
While equipment-related fatalities were
the most prevalent in 2016, cave-ins and
collapses were making headlines as well.
DRYWALL INSTALLERS
Drywall contractors continue to pay
significant premiums as a result of risks
inherent in this industry. Lifting heavy
pieces of wallboard for several hours
during the workday can result in lower
back and lumbar strains. This can lead to
significant medical claims as well as lost
wages due to injured workers taking time
off to rehabilitate. Workers’ compensation
companies that publish claim activity
suggest that back sprains from heavy lifting
continually top their list of claim frequency
because of medical expenses and lost wages.
ROOFERS
Because of claim frequency, medical costs,
and reimbursements for lost wages, workers’
compensation rates for roofers are one
of the highest classifications. Depending
upon the state where you operate, you
could be paying as much as 50 percent
if your company has a history of claims
that is more than the national average for
roofers. Although the claim amount is
not as important as the frequency, roofing
contractors will be unable to compete when
their experience modification factor creeps
higher than those of their competitors.
SAFETY AND LOSS CONTROL ARE KEY
TO REMAINING COMPETITIVE
When contractors bid on construction
projects, the contractor that is paying the
least amount for workers’ compensation
insurance is more than likely to win the
bid every time. Purchasing products
at heavily discounted prices is just not
enough to win the day when it comes to
competitive bidding. Only when contractors
implement loss control programs, supported
by safety programs, will they remain
competitive in the bidding process.
LOSS CONTROL MEASURES FOR
EXCAVATION CONTRACTORS
Excavation contractors who are looking to
get a handle on work-related illnesses and
injuries have several resources available
to them that offer support. First and
foremost, they can look to their insurance
agents for resources to help implement
loss control and safety measures to
reduce workers’ compensation claims.
They can also join national associations,
such as the National Utility Contractors
Association (NUCA), that will allow them
to network with other contractors in their
industry. Associations like NCUA also
offer a wealth of industry safety guidelines
and methods of risk management.
LOSS CONTROL AND SAFETY
PROGRAMS FOR DRYWALL
CONTRACTORS
Drywall contractors who are concerned
about workplace safety or who are
experiencing above-average claim
frequency should first look to their
insurance professionals for resources to
help get a handle on loss control. Secondly,
associations like the Association of
the Wall and Ceiling Industry (AWCI)
provide resources for safety program
implementation and offer annual events
on training and management. The key
is to get your safety and loss control
programs in place BEFORE your experience
modification factor gets above 1.0 so that
your business will remain competitive.
ROOFING CONTRACTORS
The roofing contractor industry
notoriously p ays very high rates for workers’
compensation insurance. In order to
compete, contractors must make certain
that they do everything possible to keep a
handle on their experience modification
factors. Implementing a rigid safety program
is the best method for reducing losses so that
insurance premiums will remain consistent
and allow you to compete on a level playing
field. Your insurance agent should be your
first choice for resources that will help
reduce or eliminate workplace injuries and
keep insurance premiums level. Most of the
national workers’ compensation carriers
also provide risk management tools, and
many provide a team of specialists that
your broker can call on to help you get
the necessary safety programs in place.
The three industries discussed here
are an example of contractors that are
experiencing significant losses and thus
rising workers’ compensation premiums.
Your insurance agent should be your
one-stop resource for determining the
best method for implementing proven loss
control methods which will substantially
help your business remain competitive. +
Joshua Ellis is the Loss Control Associate at Moody
Insurance Agency. He provides clients with the
essential knowledge and tools to develop effective
safety programs to meet compliance standards.
BY: JOSH ELLIS
MOODY INSURANCE
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