The company was experiencing a high frequency on workers’ compensation claims less than $5,000, while at the same time experiencing explosive growth in payroll resulting in large workers compensation audits. The insured was purchasing their workers’ compensation through the state assigned risk pool and did not have proper pollution and professional coverage in place, In addition, the company’s workers’ compensation, auto liability, general liability and umbrella policies all renewed on different effective dates.
After proper investigation it was noted that the workers’ compensation claim frequency dramatically increased the insured’s experience rating to 1.62 and the ARAP to 1.25, resulting in $126,000 in surcharges. Plus, the general liability audit resulted in an additional earned premium of $89,000, and the workers’ compensation audit resulted in an additional earned premium of $56,000. Unfortunately, assigned risk pool payment structures and individual waiver of subrogation requests proved to be inefficient. Eventually, lack of pollution and professional liability coverage was identified as a coverage gap. Scattered effective dates made it challenging for the insured to market policies effectively.
The Knight-Dik Team worked with the insured’s safety committee to establish programs which would help mitigate claim frequency, cost and length. We placed the insured’s general liability policy with a carrier that quarterly audits the scheduled hazards protecting against large general liability audits. Knight-Dik then enrolled the workers’ compensation program in a “Pay-as-you-go” payroll reporting billing structure. Knight-Dik then placed the workers compensation policy with a standard market carrier with a 15% discount, payroll reporting program and blanket waiver of subrogation endorsement. Following that, we placed the insured’s general liability policy in a specialty program that packages general liability, pollution liability and professional liability. Knight-Dik placed all policies on a universal effective date in line with the insured’s fiscal year.
The Knight-Dik Team was able to help the insured take control of their workers’ comp claims activity reducing their experience rating dramatically over three years while also reducing cost. The Knight-Dik team was also able to reduce general liability rates through a specialty program and also add pertinent coverage.
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