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 25