Bruce Eades Published in November/December Edition of Tower Times


Large telecommunication companies and carriers are requiring their contractors and sub-contrac- tors to have a workers compensation experience modification of 1.00 or lower. This is an unreason- able requirement due to the fact that it does not give a true picture of a company’s safety culture (notice I did not say safety program). Currently most telecom- munications contractors’ (line and antenna, civil, tower modification, etc..,) experience modifications are on the rise, and in large, are not their fault. Below are four issues that trigger the problem:

  1. The NCCI has changed the method of calculating experience modification. The new formula called the split mod rule is fairly complicated but basical- ly the first $5,000 of a medical claim prior to 2013 is what really effects the experience modification. Now, in 2015 the first $15,000 of a medical claim drives the modification.
  2. The governing code for telecommunications has changed from 7612 to 7600. As an example, the rate for 7612 on average nationwide was approx- imately $12 per $100 of remuneration. Under the 7600 the national average is approximately $6 per

$100 of remuneration. This is great for the client for they have seen their premium drop. Unfortu- nately, this is causing their experience modification to increase because the ELR (Expected Loss Rate) factor is lower. This means that the expected loss- es are lower when comparing them to the actual incurred losses.

  1. Not at Fault Automobile Accidents – Automobile accident are very frequent in the telecommuni- cations industry. In the event of an automobile accident, often an injured employee will trigger a workers comp claim. Many of the accidents are not at fault accidents. The workers comp claim is filed against the telecommunications company. They are sometimes subrogated and sometimes not. Even if the claim is successfully subrogated it may take years, which in turn, will stay on the experi- ence modification for years.
  2. Waiver of Subrogation – Large telecommunication companies and carriers require contractors and sub-contractors to give them a waiver of subro- gation in favor of the large telecommunication companies and carriers. Even if the large telecom- munication companies and carriers are responsible for an accident that creates a work comp claim for the smaller contractor or sub-contractor, they have to waive their right to subrogate against the large telecommunication companies and carriers.

The Bottom Line: It is an unreasonable requirement for an experience modification of 1:00. It is simply not fair or accurate.

Insurance Office of America (IOA) is a full-service insurance agency founded in 1988 and is one of the fastest-growing independent agencies in the U.S. IOA is currently the thirteenth privately-held insurance agency in the US by Insurance Journal and is the twenty- eighth largest American broker according to Business Insurance magazine. The IOA headquarters is located north of Orlando in Longwood, Florida. IOA has more than fifty branch offices across the United States and an international office in London, UK. With more than one thousand associates, IOA specializes in providing solutions for many industries of business. We invite you to engage our people, discover the difference, grow your business and experience a service you never want to leave. For more information about Insurance Office of America call (800) 243-6899 or