As someone who works closely with contractors across California, I’ve seen firsthand how challenging it can be to manage workers’ compensation costs while maintaining a safe and efficient operation. We have been riding in a soft market for some time now, but the market fluctuates and we should prepare for the transition to a harder market. That’s why I’m a big advocate for self-insured groups (SIGs).
Recently, I had the pleasure of helping a roofing contractor join the California Contractor’s Network (CCN). Not only did they gain access to a more stable and cost-effective workers’ comp solution, but they also became part of a community that truly values safety, transparency, and long-term savings.
If you’re a contractor and have not considered a SIG, here is what you need to know:
- Lower Costs Through Group Strength: By joining a group of safety focused companies, members benefit from reduced costs and shared resources.
- Aggressive Claims Handling: Dedicated claims team and special investigative units ensure that claims are managed efficiently and fraud is minimized.
- Professional Risk Management: Members receive access to training programs, dedicated safety consultants, and safety program design tailored to the construction industry.
- Rate Stability & Transparency: Rates are not dictated by the Workers Compensation Insurance Rating Bureau (WCIRB), so SIGs provide greater control and operational transparency, which means fewer surprises and more predictability.
- Member-Owned Surplus: Any funds not used for claims or expenses are retained by the group, not the insurance company, and reserved for future use or returned back to you.
My client’s decision wasn’t just about lowering premiums (their incumbent carrier and CCN were very comparable in pricing), it was a strategic move focused on long-term risk management and operational stability.
What really sealed the deal for them were three key factors:
- Risk Management Solutions: CCN’s proactive approach to safety and claims prevention stood out. From customized safety training to leadership development and real-time engagement tools, the contractor saw this as a long-term investment in their workforce and bottom line.
- Cost Stability: Joining CCN meant eliminating the volatility of the experience modifier (Ex-Mod) over time. Split wages are locked in at the time of entry, providing predictable contributions year over year; a huge relief compared to the fluctuations they faced with traditional insurance.
- Claims Management Services: The contractor was impressed by the robust claims infrastructure, including nurse triage for immediate injury response, a special investigation unit to combat fraud, and aggressive claims auditing. These services matched, and in some cases exceeded, what they had with their previous carrier.
SIGs provide the contractors with a clear, consistent cost structure that shields them from the volatility of the traditional insurance market. It’s a strategic move that all contractors should be looking at to positions themselves better towards sustainable growth, even as economic conditions shift.
Each month, Swarts Manning insurance experts cover relevant topics for your business. Stay tuned for more discussions about managing your insurance and industry-specific tips.
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