By Bob Tuman, CCR Safety Consulting
Dan, the owner of a large union painting contracting firm, called me- baffled and angry about the 20 point “mod” increase (from .74 to .94) and the resulting $40,000 increase in his workers’ compensation premium- from $200,000 to $240,000. “How am I going to explain this to General Contractors?”
A review of the previous three years’ claims and Dan’s recollection of accidents and injuries showed no small claims and one claim which had closed for $108,000, surely not a major hit to his mod and premium.
“Can you get me your Experience Modification Worksheet?”- a document available to all contractors from their states’ Workers’ Compensation Rating and Inspection Bureau.
“Where did this $350,000 number come from?”, I asked Dan. He didn’t know. He called the next day, recounting that an employee, working on a CCIP (Contractor Controlled Insurance Program) job, had fallen, was badly injured, and his return to any type of work was unlikely. “How did this cross over to my mod”?, Dan asked. I told him that all CCIP or OCIP (Owner Controlled Insurance Programs- aka “Wrap Ups”) workers’ compensation claims adversely impact subcontractors’ experience modification rates.
Dan: “If I had known this, I would have gotten involved right away!” I dug deeper, asking for the General Contractor’s accident investigation. “A contractor removed the leading edge fall protection, and didn’t put it back,” the GC’s lead investigator found. The GC did not identify the contractor, despite repeated requests. The claims adjuster told us that the employee has
filed a lawsuit against the unknown contractor, but it is moving slowly, and Dan may never see relief from his elevated experience modification rate. It became clear that the General Contractor removed the guardrail and neglected to put it back.
I also did an OSHA “Establishment search” to see if OSHA conducted an accident investigation. The GC never reported the near-fatal accident to OSHA, despite the requirement to do so.
“How do you want to proceed?”, I asked Dan. “Let’s pause,” he said. “I’ve got a lot of work with this GC, and more to come”.
PS: We have repeatedly asked for quarterly updates on both the workers’ compensation and third party claims over the past 6 months, but the adjuster and the General Contractor’s risk management consultant have stonewalled us.
Lesson learned: Get involved from the get-go.
About the Author:
Bob Tuman is president of CCR Safety Consulting in California, providing safety consultation to construction contractors and performing Workers’ Compensation and General Liability Loss Control Surveys for property and casualty insurers. For further information or to contact CCR directly, please contact: 805-545-5976 or email bobtuman@gmail.com
