This week, Mac Bell joins us to talk about safety and how a good relationship with your insurance agent can help you avoid safety claims and save money.
Topics we cover in this episode include:
- Engagement with policy holders is proven to reduce claims
- Common mistakes that lead to safety claims
- Why it’s important to get workers back to work quickly and how to do it
- Experience Rate Modifiers
- Why you should always turn in claims, even if just for reporting
- What you can do today to improve your safety program
Watch the video version of this episode on YouTube.
Join the conversation on our LinkedIn page: https://www.linkedin.com/company/contractor-success-forum
[00:00:00] Wade Carpenter: Welcome to the Contractor Success Forum. Today we are talking about how to reduce safety claims and having a discussion about risk management. And we’ve got a very special guest with us today.
Here on the Contractor success Form, our mission is to provide game-changing financial education for contractors to help you be more profitable, grow and succeed in your business.
And who is here to help us do that? As usual, we have Stephen Brown with McDaniel Whitley Bonding and Insurance. And I’m Wade Carpenter with Carpenter and Company CPAs. And today we are privileged to have Mac Bell of Builders Mutual Insurance. Mac is the Regional Manager of risk management. Matt, can you tell us a little more about yourself and what you do?
[00:00:49] Mac Bell: Absolutely. Thank you Wade and Stephen for having me in this morning. As part of what I do, I’ve been involved with construction, health, and safety now for 34 years. I started right out of, of college with a degree in safety and health, and went into the construction industry. Found it fascinating, found it a challenge that that changes every single day.
I did spend the better part of my career with Liberty Mutual Insurance, spent time with them before spending the last five years with Builders Mutual. As you mentioned Wade, I am one of three regional managers in the risk management department that we have at Builders Mutual. We cover eight states in the district of DC. My territory is basically the lower portion of North Carolina, South Carolina, Georgia, and Florida.
[00:01:35] Stephen Brown: That’s a lot of contractors, Mac.
[00:01:37] Mac Bell: There are a bunch to see. And as I said, it’s, it’s a changing environment. It’s a challenging environment and, and it does make us just think on our feet every single day we’re out in the field working with our policy holders.
[00:01:49] Stephen Brown: Well, our listeners know about that. They’re contractors and there’s not a tougher group to keep safe.
Why safety is important in construction and how it has evolved in recent years
[00:01:57] Mac Bell: It is, the construction industry is just inherently dangerous with the exposures that workers are facing every single day they step onto the job. And as I said, when I first started this, my task was to help people come home safe. Their families need them, their friends need them. And it is a dangerous environment that they’re in every single day. So anything we can do to help them address these exposures and concerns is important.
[00:02:25] Stephen Brown: Yeah, and I can say this too, even though OSHA’s been around since after the depression, safety, really when, I guess Mac, we started about the same time in this industry. And safety was not, it was not a buzzword. I remember having a conversation with, with one of our contractors and I was probably in my mid twenties, and I was talking about safety and he looked at me like my hair was on fire. He really did.
And he goes, let me tell you something, we don’t have claims because they know I’ll kick their ass if they have a claim. I’m like, man, you’re brilliant. I’m so glad to know you.
[00:03:04] Mac Bell: It was a tough environment when I came up as well. You’re telling our age, stephen. As I came in as a, as a greenhorn, it, it, one of my defining moments was with a a seasoned construction veteran. And I tried to slide some OSHA lingo in with him and he set me straight real quick and, and the, the conversation was a little bit blue, so I’ll leave it outta here.
But he told me real quick to respect people. And not try to come across as an enforcer. And the conversation we had way back in the late eighties, again, telling my age, that conversation set the tone for me personally of what I wanted to do. And I, it was all about helping people.
So there is a way to mix OSHA into a conversation and not feel like enforcement.
[00:03:55] Stephen Brown: Yeah, you just, you just say those, those four letters and contractors are gonna start getting stressed. But you know, you’re so right and that’s why I asked you to be on here. Of all our insurance companies we represent, Builders Mutual is really one of the best, Wade. They truly, they keep over 85% of their customers through relationships.
And these relationships that come with safety and loss control just come with, first of all, developing a relationship. They’re not coming in there stomping your feet and screaming and yelling. And Mac, that’s wise comments there.
[00:04:35] Wade Carpenter: Yep.
[00:04:35] Mac Bell: It was, as I said, it, it just really set me back because you’re, you’re coming into the industry. You’re trying to prove yourself. You’re trying to stand up and show your knowledge. And when I flexed my brain he told me real quick, that’s not how you win over people. How you win over people is listen and understand the challenges that they face, and then help them try to figure it out within the boundaries of what the regulations allow.
How do insurance companies help their customers with risk management?
[00:05:03] Stephen Brown: Well, I guess, main thing our listeners might wanna hear about, what do insurance companies do to help their customers with risk management? And you can’t speak for everyone, but you can certainly speak for Builders Mutual.
[00:05:17] Mac Bell: I will. I I will be happy to do that. First of all, insurance sometimes becomes a dirty word. People don’t like it as a necessary evil, but as part of what we do, we do provide all lines of coverage for our policy holders. And then we seek to understand their business. That’s one of the first things that our risk management consultants do when they step on site, they try to understand the business.
All we do at Builders Mutual is construction. We are construction focused. So we’re not drifting away from the roots of where we came from, the North Carolina Home Builders Association. We actually reach out to the policy holders, try to find the opportunities to meet them where they are on site, see their work, and then talk through solutions that could cause harm to come to their employees. And so that’s in a nutshell, it.
Engagement with policy holders is proven to reduce claims
[00:06:12] Wade Carpenter: Yeah, Mike, I know safety is not one of those things that most of my contractors want to even deal with, but you know, they do wanna figure out how to save money and, I think reducing these claims. Stephen and I were talking as well, that, I guess you guys put out some statistics about safety and that kind of stuff. I didn’t know if you wanted to give us some wisdom on some of that?
[00:06:34] Mac Bell: I’ll share what I can. Just the fact that we are enabled to engage and step on site with the policy holder, one visit. One visit has shown through statistics to reduce the likelihood of an incident 27%.
[00:06:48] Wade Carpenter: Wow.
[00:06:49] Mac Bell: The second visit increases that to 41%. So our engagement with the policy holders is something that, it comes with challenges, but when they understand we’re trying to help them with their business, relate to them claims we’ve seen that mimic what they do on a daily basis, that resonates with them.
So there are statistics there. For every Time we step on site, we are reducing the likelihood of claims happening to them. So.
[00:07:21] Wade Carpenter: Right.
Common mistakes that lead to safety claims
[00:07:22] Wade Carpenter: So what are the things that you commonly see that where they drop the ball and maybe they end up having a safety claim?
[00:07:29] Mac Bell: The main thing is having that claim reported into us. A lot of contractors have the issues and they want to pay for it out of pocket. And that’s where things can get outta hand. Because once the claim is reported into us, even if it’s just a minor first aid, we’ll take it as a report only, so it does not impact them from their OSHA rate or anything like that.
But what it does, it puts our claims and our adjusters on alert for this in case the case gets out of control. All of a sudden you have a person that goes to see their own doctor, that doctor puts them outta work. Now the contractor is short people, the claim cost just gets out of control and it makes it challenging for us to get our arms around it wants the horse is out at the barn, so to speak.
[00:08:16] Stephen Brown: Yeah, you’re, you’re right.
Why is it important to get workers back to work quickly?
[00:08:18] Stephen Brown: And why is it so important that that you get your worker back to work quickly?
[00:08:23] Mac Bell: Workers that come back to work, first of all is productivity. You, you as a contractor, we deal with a lot of smaller contractors. So if you take a contractor that has nine employees, right? Everybody’s doing everything But When you lose one now, you’ve doubled somebody else’s workload. We are no different than any other construction outfit that’s trying to hire. The labor market is so challenging right now to get people.
Some of the other issues, Stephen, are, some people, the longer they are outta work, the less they want to come back to work. And as they’re out of work, the the comp costs start piling up. They then have to come back, if they come back, they have to go through a work hardening process, which basically gets them back up to speed so that they are a hundred percent to do their job. So there’s, there’s a number of challenges out there to to make it so important to get somebody to return back to work after injury.
What we like to see is contractors have some level of modified duty programs. Now that’s tough, that’s tough with what we do in our industry, but if we can get them back on the job and back to their normal pay, we’re able to get them back into the workforce fully sooner and reduce the compensation costs.
How to bring someone back to work with modified duties
[00:09:44] Stephen Brown: So what are some practical ideas of you’re bringing someone back to work, and you’re thinking, I haven’t got anything for them to do.
[00:09:52] Mac Bell: Yep. Hear that–
[00:09:53] Stephen Brown: –they’re a construction worker. They’re, the old, the old joke was have them count paperclips. But the whole point was Wade, you know, if you get them back to work, then the the payment benefits cease.
[00:10:05] Mac Bell: Mm-hmm.
[00:10:06] Wade Carpenter: Right, right.
[00:10:07] Stephen Brown: Then they’re not laying around at home watching TV all day with commercials, attorney commercials.
[00:10:14] Mac Bell: That’s a fact. That’s that’s what daytime TV is. And the counting paperclips, that was a way back when, I remember those days when we were getting people back to work and that was almost like a punishment to make them go back to work.
But what we can do, what what happens now is, is when you start looking at how do we bring somebody back to modified duty, one of the leading causes of injury on the job site comes back to housekeeping. Simply housekeeping and keeping the job clean. So there’s always an opportunity to bring someone back and have them be a grounds person for a roofer. Have them be on the ground, not picking up material, but sweeping up and cleaning up and keeping things organized.
Some of those jobs that fall within the restrictions that have been placed on the injured worker to allow them to come back in some capacity.
[00:11:03] Stephen Brown: Okay. So you gotta be a creative, talk to your agent. You can find something for them to do. But here’s the thing, then all you’ve got is medical expenses. The compensation expenses stop. So you’re controlling the worker’s comp cost.
Experience Rate Modifiers
[00:11:20] Stephen Brown: And everybody knows that your worker’s comp is affected by your experience mod. ERMs, everybody calls them experience rate modifier, but every new construction company starts off with a one. And after three years of spending $5,000 or more workers’ comp premium you develop an experience mod. So, as you grow, you have certain customers, especially the ones doing plant work, and they require you to have an experience mod under a one.
The lower, the better. And that’s a reflection of your safety because then you don’t have claims, you have a low experience mod.
Why you should always turn in claims, even if just for reporting
[00:11:56] Stephen Brown: We were talking about finger cuts. You turn them in for reporting purposes, and then what if that finger gets gang green in it later? What if they get an attorney and all sorts of crazy stuff happens? Then you’ve got builders mutual and their full team of experts to help settle it for you, and if you think you can do it yourself or you think you can handle it better than an insurance company, then you know, go start your own insurance company.
[00:12:21] Mac Bell: Well, Stephen, that’s, that’s exactly what happens sometimes. We have the, the thought process of we can take care of that. And by the time it does get to our claims people this, this incident, this injury has gotten outta control. And so again, the report only doesn’t impact their mod. It does help us get control of the claim so we understand and we can control medical, where they go to see the doctor, and make sure we have them seeing the right people when they need to see the right people.
[00:12:52] Stephen Brown: Sure. And there’s also laws in every state about how long you have to report a claim. And a attorney gets ahold of you and you’ve tried to finagle it yourself, and it, it gets worse. It’s just gonna happen. It’s just, just don’t do it. Just turn in the claim and move on. Get back to work.
We also talked about, when someone’s hurt, what are those costs? Well, your experience mod can go up, your insurance can go up, but then there’s the variable cost. You’ve lost the production, Wade, of that worker.
[00:13:25] Wade Carpenter: Right. Right.
[00:13:25] Stephen Brown: For that period –that you and another worker who’s taken him to the hospital. So that production has to be made up. The variable cost of someone getting hurt is, is, is huge.
It’s so much more than the cost of insurance or worker’s comp. And also, Mac, I was reading your annual report that for every dollar you spend on safety, you end up saving four to $6. Now that, that was an OSHA fact, do you believe that?
[00:13:55] Mac Bell: I do. It’s so hard to prove though, because we do have a lot of policy holders that, that we see and they haven’t had these experiences yet. Thankfully. That’s a good thing. But then when we’re trying to sell safety, again, the construction industry is a hard industry. Yeah. I haven’t had any injuries. That’s not gonna happen to me, man.
That’s, that’s a common theme. And, and when you try to start, expressing concern and, and offering recommendations to a policy holder that’s going to cost them $4,000, well then now they don’t see that because they haven’t had that incident.
Education reduces the chances of loss
[00:14:29] Mac Bell: Just this morning prior to coming on the podcast, we get claims alerts. And I just got one this morning for an increase up to $700,000 for a relatively minor claim. Out of control, out of our touch. And all of a sudden now we are in deep with a claim that could have been handled a lot easier.
So yes, I do believe that, that there’s a savings every time we get a chance to step on site. I go back to those first numbers that I threw out at you, 27% reduction of a chance of loss. Just one visit from risk management. 41% if we’re on site with you twice.
And it’s because we’re raising awareness when we’re there. We’re pointing out issues, we’re educating. We do a lot of impromptu training right on the job site. We’ll bring people down off roofs, we’ll bring them down off ladders if they’re being used improperly and educate right there.
So I do believe that that our presence of risk management and loss prevention of whomever on site does help with those actual costs.
[00:15:35] Stephen Brown: Right, and like I said, you educate your agents too to be better, better construction agents, and I really appreciate that over the years. And I also appreciate you going into safety. To say, I want people to be able to come home to their families at night. It sounds like that’s not anything, but it is everything.
[00:15:58] Mac Bell: When you have to have a conversation that somebody’s not coming home–
[00:16:03] Stephen Brown: And, and we, you can’t be in the business as long as we have without having death claims. And unfortunately we had one week before last, our office did. Last week is interesting. One of my clients, not Builders Mutual by the way, they, they hit a transformer and luckily they knocked out an apartment during the day when that apartment was mostly young to middle-aged people lived there. So they were all at work and we got the power put back on.
But the safety manager was there all day answering questions. The people that were freaking out over their, their power worried about whether this was gonna turn into a huge claim. And I told him, I said, I, I just want you to know how much I appreciate you, because you may never hear, he may never hear it from his employer because a good safety director, it seems like they’re not doing anything because they’re not having claims. And, and you have a, a claim and all of a sudden, oh, oh, we get their safety director over there, you know.
[00:17:05] Mac Bell: Well, we and, and we at Builders, I think we have developed a, we have a very seasoned staff in the field. We have 21 consultants that are located throughout our footprint. And as I said, with each of them, none of them have less than eight years experience in the field.
At Builders we have just recently developed a, a path so we can promote from within, so we can bring people up through maybe the insurance world that’s not really been exposed to safety. So we’re, we’re working on a mentorship program where we can bring the younger generation in and, and have them carry a torch, so to speak.
Because you did mention earlier the, the age and the construction workforce. The average is just going up and we’re losing so much knowledge, so much skill. We have to bring up and mentor to keep the level of quality that we’ve had.
What contractors can do today to improve their safety
[00:18:04] Wade Carpenter: Right. So Mac, or, can you give us say the top three things you tell contractors to go out and do today to improve their safety programs?
[00:18:13] Mac Bell: Yeah, absolutely. Number one is talk to your people. just, talk to your people. Um, Absolutely. Talk and listen. They know their business. They know. I can go on site and I can ask an owner, what keeps you up at night? What worries you? And they give me two or three things.
What we are seeing, falls is just number one. It comes across our desk and there are many of them and they’re expensive and they’re fatal. So, you go back to talk to your people, listen to your people.
Another thing I would say is, connect on the job site so you can see. I can talk in the office with everybody, and there’s a bunch of head nodding going on and they understand, but you’ve gotta go out, you’ve gotta see the work and make sure it’s being done.
The third thing I would say is enforce your policies. Enforce your policies. Because if you don’t, if you go out and you see people climbing on a roof and they’re not using fall protection and you don’t say anything, you’ve condoned it and started to create the acceptance of the lack of fall protection.
It’s a hard thing to have that conversation with somebody, but it’s harder to talk to their family and tell them they’re not coming home.
[00:19:24] Stephen Brown: Yeah, that expression safety comes from management. It’s just so true, just exactly what you said, Mac, you, you just let one thing slide and then it becomes standard practice.
[00:19:37] Mac Bell: Yep. And it’s a challenge right now in and, and especially again, our business being in residential construction, a lot of our policy holders are home builders and they have roofers. The roofing industry right now is just such a challenge. Fall protection, this is where the, the rub comes, Stephen. When I’m talking to the roofers who are getting paid by the square and telling them, you really need to be anchored in up there with fall protection and, and it’s, boy that’s going to, that’s gonna cut my production in half is gonna cut my pay in half.
So those two worlds colliding just make for constant challenges for the owners, for us, for the workers. We all have to try to find the common ground somewhere to make sure we keep our people safe when they’re out on the job site.
[00:20:27] Stephen Brown: Mm-hmm. What are the main types of most severe injuries that you’re seeing?
[00:20:33] Mac Bell: It, it, again, it all relates back to falls. We do see a lot of severe injuries coming from auto collisions, to where we have workers traveling from one job site to another. The technology that we have now, people’s attentions are lost because they’re in electronic devices. So we challenge our policy holders who have radio communications or contact with their employees, hey, don’t text them when you know they’re driving. Because they’re gonna text back. So we, we see a lot of severity there. And as I said, the falls we, we just, we get those notices across our desk daily where we have a, a 22 year old worker that’s been on job site for a week and has fallen.
[00:21:21] Stephen Brown: A Oh.
[00:21:22] Mac Bell: And now has, lost the use of limbs or life.
[00:21:27] Stephen Brown: Yeah.
[00:21:28] Mac Bell: What we are seeing right now is workers that have just been hired, and the older aging workforce. Those are the two areas where the claims are happening. The–
[00:21:41] Stephen Brown: It sounds like it would be the perfect storm, doesn’t it?
[00:21:43] Mac Bell: It is the aging workforce. That’s what’s happening in construction. We can’t do the things that we did when we were a younger pup, and we still think we can because construction has always been a macho type industry. So we have that.
Then we have the younger generation that’s coming in, the people they’re hiring, and this is where we talk to our owners. Educate these people before you put them on the job. We’ve had claims of day one on the job and gone. Loss of life. It, it, it just. It, it, it really just is frustrating.
It’s sad and frustrating when you see that and you see that a, a person has left this world that is 23, 24 years old and had a whole life ahead of them. So, and, and that, but that’s the drive. That’s what’s kept me in this, this industry for 30 plus years. Still got a lot of gas in the tank here.
[00:22:37] Wade Carpenter: Yeah.
[00:22:38] Stephen Brown: Hey, I’m, I might add too, when you talk about fall protection, you were talking about roofers a lot, but there’s so many things you climb up on that you fall off of that I’ve seen claims with. Uh, short ladders, small ladders, stepping up on a box, getting on and off equipment.
So anyway, three points of contact listeners, three points. You always have three points of contact with anything you’re climbing up or down from. Always. And one thing that you know we’ve done is put stickers on the equipment by that handrail, reminding of them getting down and getting up. Just little, little things like that. But
[00:23:19] Mac Bell: But it goes back to to training too, Stephen, observation. Because habit. If you don’t coach, when you see that incorrect behavior, habits form, and we don’t think about it because it’s so routine and part of our day getting in and out of the cab of a vehicle. A CDL driver that handrail doesn’t become– because they have papers in the hand and everything else. So we have to, we have to coach and, and remind people because good people make mistakes.
It’s not people looking to find a, find a rule to break or bend. We get caught up in the daily routine of the day and those things don’t resonate with us because it hasn’t happened. But you talk to somebody that’s fallen out of the cab because they didn’t, and guess what? They do now, because they, they, they had that experience.
[00:24:11] Stephen Brown: There’s knee injuries, there’s broken ankles, there’s everything coming from getting out of equipment.
[00:24:16] Wade Carpenter: Yep.
[00:24:17] Mac Bell: We do focus a lot with ladders as well because that’s probably the, the most common tool that all of our contractors have. Everybody’s got a ladder. Nobody wants to throw a ladder away. They, they get dinged, they get bent. Oh, they can’t get a new ladder because it costs, and there it comes back to, how does that, how’s that safety saving me when they’re making me buy a new ladder? Well, because we have ladder claims that are under hundreds of thousands of dollars because people fell off because of the ladder condition was not good.
[00:24:45] Stephen Brown: Mm-hmm.
[00:24:46] Wade Carpenter: Right. Well, this has been a lot of things to think about here. Sobering thoughts, but Mack, you got any final thoughts before we wrap up?
[00:24:54] Mac Bell: I would just say to, to everybody that’s hearing this, it’s that. Builders Mutual is a caring insurance company that wants to partner with you. That’s our goal. Our goal is not to come out and, and be an enforcer, to be an inspector. Every safety person that I’ve ever met has this kind of drive. They have a drive to help protect people.
Listen, have an open mind. Try to see things that could harm your people and, and find ways. Reach out to a consultant if you can’t figure it out. Because that’s what we do for, for a living.
[00:25:30] Stephen Brown: That’s awesome. Mac, thanks for coming on. Next time you’re in Memphis, look me up so I can, can feed you some barbecue.
[00:25:38] Mac Bell: Oh, I’ll definitely will do that, stephen. Don’t worry about that. I got your phone number. I can track you down now.
[00:25:43] Wade Carpenter: All right. On that note, thank you Mac for joining us. Thank you all for listening to the Contractor Success Forum, wherever you might be tuning in from.
Find this on YouTube channel at Carpenter CPAs for more information. And be sure to check the show notes for more free resources. We’ll put Mac’s contact information there too if you need to talk with him.
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[00:26:29] Mac Bell: Be safe.