Insurance companies are a lot like the IRS, the higher your tax rate, the more money they will get. Insurance companies the higher your experience mod, the more money they will get.
One of the best ways to reduce the cost of worker’s compensation is to reduce the cost of claims. Implementing a safety program to prevent claims is first and foremost but sometimes claims are inevitable.
90 days after renewal every year, your insurance agent should be reviewing your Worker’s Compensation history.
The process should look like this:
1.) Get out your loss runs. This is a history of your claims for the last 5 years. Scan through the list for any open claims.
2.) Locate any reserves set to high. By identifying the open claims in step 1 and scan across the report to identify those still open with a high reserve set. Reserves are set by the adjuster based on the amount of time out of work, the employees medical condition and severity, anticipated medical expenses, etc.
3.) Develop a plan to get them reduced. Stay in contact with the injured employee while out of work. This lets them know you care. Start a light/duty return-to- work program. Implement a medical case management program.
The employer that stays involved in the claims process has the most success at getting the claim reserves lowered.
Author Lisa M. Flaherty is an expert in the field of workers compensation. She is a licensed NYS P&C agent and website publisher. Her expertise is working with business owners eradicating critical coverage gaps in insurance policies, and working with employers to reduce workers compensation costs. Her clients include franchised and non-franchised auto dealers, contractors, retail, hospitality and manufacturing. Contact: Lisa@tiains.com
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