Comp-Save Success Stories

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Rib Mountain Glass Discovers Value of Independent Agent

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Kathy Danen, Business Consultant
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Rib Mountain Glass Discovers

Value of Independent Agent

Wausau, WI
Rib Mountain Glass
Insured
Located in Wausau, WI, Rib Mountain Glass specializes in glass for commercial entrances and storefronts, construction glazing and retail glass sales. With 40 employees, the company had sales revenue in 2005 of approximately $2.5 million.

Situation
Mosinee Insurance Agency began insuring Rib Mountain Glass in 1995. In 2002, the company moved its account to a direct insurance carrier at a time when rates were increasing and lower pricing seemed to be the issue for the owners.
The direct writer promised the coverage would be the same as that which was provided by Mosinee Insurance. It wasn’t. The direct writer also agreed to provide Rib Mountain Glass with a safety manual. What they received was a “generic template” from a web site that was not specific to the glass business. To use the manual, Rib Mountain had to revise it for its purposes. When it came to issuing Certificates of Insurance, the direct writer did not charge for them initially when ordered with the policy; however, it then began charging $50 to $150 for each Certificate.

Assessment
The Rib Mountain experience illustrates several important issues:

• Insurance policies that appear to be identical can be quite different. It is often difficult for insureds, who are not familiar with coverage issues, to identify the differences.

• Extra charges for Certificates of Insurance. Certificates are essential to doing business as a contractor. Since Mosinee Insurance never charges for Certificates, Rib Mountain’s management assumed there would be no charge from the direct writer.

• The value of the independent agent. Through this experience, Rib Mountain Glass discovered the value of having an independent agent manage its insurance program.

• The value of a Certified WorkComp Advisor. A Certified WorkComp Advisor at Mosinee Insurance reviewed Rib Mountain’s coverage and found the direct writer’s handling of claims had not been good. Some claims that should have been cleared in a year were still open two years later. Rib Mountain’s Experience Modification Factor (Mod), which had been 0.66 in 2002 when they left Mosinee Insurance, nearly doubled from 2002 to 2004, reaching 1.17 in 2004. The increase meant that Rib Mountain was paying $30,000 more in premium costs than it did in 2002.

Solution
Six months into the 2005 policy year, a representative of Mosinee Insurance made a courtesy call on Rib Mountain to see how the direct writer’s program was performing. It was then that Rib Mountain’s management requested a meeting in 90 days to move the account back to Mosinee Insurance. This occurred on the anniversary of the policy.
As Wisconsin’s only agency with Certified WorkComp Advisors who are trained by the Institute of WorkComp Professionals, Mosinee Insurance knew how to handle Rib Mountain’s claims properly and in the most cost effective manner.

Result
Mosinee Insurance has been able to stem the tide of Rib Mountain’s rising Mod. For 2006, Mosinee has projected the client’s Mod will be 1.11 and should continue to drop as the improperly handled claims are cleared. Says a representative of Rib Mountain Glass, “With Mosinee’s help, we are understanding WorkComp better and using their guidance we’re learning how to get our rates and costs under control.”