What You Don't Know About Workers Comp (Part 2)
Workers Compensation is a very complex policy. Most people think they have no control over the costs of work comp costs. However, work comp is very controllable if you are proactive and get involved. Most importantly, hire an agent that specializes in work comp. I want to cover just a few topics of work comp that most don't think about.
The Claims process. When your employee got injured what did you do? Did you send them to the Doctor who prescribed pain medication for a strained back and recommended they stay off work for a week? Did you know that if your employee can be back at work, even light duty work, within 72 hours of his claim, you save 70% of the cost of that claim. It's important to know the doctor you are using. In case of a strained back, the employee could have probably been ok going home for the day, taking ibuprofen and coming back the next day for light duty.
Did you know that when a claim occurs the insurance carrier sets a reserve amount for how much they think the claim will be? That reserve amount counts the same as actual claim dollars spent. It's important to always request your loss runs 5 months after the anniversary of your work comp. After the 6th month the claims or reserve dollars shown will then effect your experience mod for the next year. However if you get the loss runs and notice a claim should be closed, or you dispute the reserve amount, you could save money.
The longer your injured employee is out of work the worse your experience mod will be affected. It's important that you or your agent are in constant contact with the: Employee, Doctor, and Case Manager. Believe it or not, sometimes work comp claims go unnoticed and you have an employee with a sprained ankle supposed to be out for a week, and he is still in the Work Comp system 4 weeks later.
Transferring Risk. If you use subcontractors you will always want to make sure they have their own work comp policies. If they do not, you will be hit for their costs come audit time. Not only do you want to collect certificates from them, you want to have them sign a contract which makes certain their insurance pays first. In most policies, waiver of subrogation, primary non-contributory and indemnity clause are only enforced if there is a contract in place between you and your subcontractor. We have a method of protecting our clients in this area.
Hiring Practices. You are probably thinking, how could my hiring practices affect my work comp? First of all, are you hiring a criminal? Are you hiring somebody that has figured out the work comp system? You want to make sure you are at least doing background checks and drug tests. These employees you hire are the face of your company, you want to make sure they are keeping the reputation you worked so hard for.
With regards to the recommendations I made above, we can help with all of these items. We are set up to give access to our clients to run their own background checks for their employees. We brought in an attorney to develop a contract for us to give to our clients who use subcontractors. We would still advise our clients to have their attorney look over. And relating to your claims process, we make sure we cover every angle when a claim occurs.
If you have any Work Comp questions or would like us to take a look at your policy, please give us a call.
