From Bob’s Desk: Being safe pays
Did you know Elm owns part of an insurance company?
Why we love safety? There are so many reasons!
- We appreciate and respect our coworkers.
- We want everyone to go home safe and sound every day.
- Great safety opens opportunities to work for great clients.
- Being safe saves money.
Now there is a new reason, being safe pays us! In 2018, we joined with a group of about 30 companies that had formed their own insurance company called Four Corners Construction Group (FCCG). The member companies are like Elm, dedicated to being safe and doing high-quality work. The group works hard to share information and become even safer.
The way traditional insurance works is the money paid to an insurance company over a period pays the claims incurred over a period with a profit left for the insurance company. Safer companies subsidize less safe companies and, on average, the insurance company makes a profit. In some years Elm had no claims and less than 18 percent of our premium was being paid to claims.
As a member in the FCCG, each of us pays for our own claims with our own money. If a tree lands on one of our trucks, like it did a couple years ago, our own reserves pay for it. We are covered against very large losses by the whole group and reinsurance.
How does Elm get paid? Since we joined in 2018, we have paid premiums similar to what we would have paid in the commercial insurance market. This money stays in Four Corners to pay our claims that might occur each year. As time goes on, claims against past years become less likely and the money becomes surplus money in Elm’s account. Eventually this surplus will go back to the member.
We have now participated and maintained a good loss record long enough to allow some of the surplus to be returned.