East Bernstadt Ind. board told two workers comp claims, high loss ratio behind nearly $14,000 jump in insurance premium; other coverages saw slight decline

Sentinel-Echo, London, June 5, 2017

Insurance rates increase for East Bernstadt School District

For a small school district like East Bernstadt, things come better to it like higher graduation rates and better performance on state testing.

But one thing that hurts the small district, is insurance claims.

Because the district is as small as it is, just one or two claims throughout the course of one year can drastically effect their premiums, which was the stark reality learned at last Wednesday’s board meeting.

David Livingston, vice president of Roeding Insurance, was the bearer of this difficult to hear news to the school board.

“The bad thing is, what’s detrimental for East Bernstadt is that you’re such a small account,” Livingston said. “If you have one or two claims, it really adversely affects you.”

And what affected the East Bernstadt Independent School District this year, were two workers compensation claims back in the 2015-16 school year.

When insurance companies factor in what a company’s premium for workers compensation is going to be, they base that calculation on the experience modifier, which raises or lowers based on the amount of claims throughout the year. Less than 1.0 is where companies want that number to stay.

Because of those two claims this year, the school district saw their experience modifier raise from a 1.15 to a 1.77, a 53 percent increase, Livingston said. This has caused their premium for next year to rise from $26,000 to $39,858.

The district also currently has a loss ratio of 869 percent, which Livingston said needs to be around 60-65 percent.

“That’s real money, you put the percentages to it and that’s real dollar, that matters,” Livingston said. “When you’re looking at teachers that’s four or five jobs.”

Livingston added that when he has had other accounts with an experience modifier and loss ratio so high, the insurance company will put a debit on the account up to 30 percent in an attempt to get their money back as quickly as possible. He was pleased to announce that the company will only be charging the standard rates this year and did not add a debit.

He added that it’s possible to get that experience modifier back down, but it’s going to take everyone working together. “It could be worse. But it can be better going forward, and we can only get better going forward by working together.”

“What we want to do, is at the beginning of the school year,” Livingston said. “Is to let us come in that first week and take 15 minutes and just talk to the staff about the importance of staying safe here.”

It’s important for companies to keep the same flow of work going throughout the year, Livingston said, and keeping the same people in those jobs that are best at it.

“The best substitute you have is never going to be as good as your best teacher,” he added. “And your best maintenance and cafeteria workers and all of them, their substitutes are not going to be as good as they are in the whole process.”

He also added what’s more important to him, is that all the employees go home safe at night.

“This affects their personal life as well,” he said. “And to me that’s probably the most important thing, that they’re able to spend a long time with their family and friends after they leave the work place.”

Board members agreed that it would be a good idea for them to come back and speak to the staff, saying that it would be good for them to see the numbers and how it actually affects them.

“I think it would be good to let them see this. We can also let all the staff know that if we hadn’t had an increase in insurance than it’s likely they would have gotten a two percent raise,” said Jim Sutton, vice chair for the school board.

The other premiums stayed relatively the same Livingston said, with the liability and property all decreasing. Besides workers compensation auto was the only other area that saw a slight increase, to which he said is just due to the marketplace.

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