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14.5% Workers Comp Rate Hikes in Florida! What do I do now?

You do what you can to do your business every day and create opportunities for yourself, your employees and your customers. Rates of everything is rising, property cost, materials, shipping, employee wages. The state of Florida has now said its time for workers’ comp insurance to do the same. The rate increase is to be 14.5%! Articles can go into much more detail but ultimately medical costs, legal costs and claims expenses rise over time and Florida workers compensation rates are rising to catch up for the natural changes that have taken place and certain court rulings have made precedence that support the increased cost. There are fair arguments for and against this change but at this point we work with what we have, so as a business owner what can you do?

The state of Florida is a rate mandated state for Workers Compensation which means the starting rate is the same for everyone based on their classification code, so every carrier should be offering the same rate. There are some exceptions that can be helpful for you to keep in mind. Here are a few things that can help benefit you in combating this increase with a more competitive option:

There are some exceptions: Some of our carriers have programs for particular industries that allow for discounted rates(5% below state set rates) one in particular caters to Retail stores, Restaurants and Professional Offices(Law firms, Accountants, Doctors offices, etc.)

Check with appropriate discount programs: The Florida workers compensation system has discount options available if you meet the guidelines and have these policies in place for your business. They do have an application for each and require certain protocols in place but these can save 5% on your Florida workers compensation rate.

Drug Free Workplace Credit
Safety Credit

Divident Plans: Some of our carriers offer dividend plans in Florida that reward businesses that control their claims. One in particular offers a 5% dividend for businesses paying 5-10k in premium and keeping a loss ratio under 5% and for accounts over 30k in annual premium they can qualify for a 20% dividend if they have a loss ratio under 20%. Like anything they do have some basic eligibility criteria but this is a huge way to reward safe business operations and lower your overhead against your competition.

Review loss control Measures: We do understand accidents do happen, however most accidents with better preparation can be prevented. A few areas to focus on:

Hiring Practices: Hiring the right employees that are experienced in the field and vested in your business are your lifeblood. Don’t put that in the hands of just anyone.

Safety Controls: Start with OSHA basics and if you have a unique business you might need more. Keeping your employees safe and preventing workers comp claims is the best way to save money on your workers comp.

Document everything: If you have safety meetings, a safety policy, drug free workplace, make sure this is all in writing and in your employee handbook. Make sure sign offs are in place so your employees are aware of these policies. This can be a great tool to prevent claims and keep a culture of safety that you take seriously in your business.

Manage your workers compensation claims: As you develop an Experience MOD over time for your Florida workers compensation claims history, your premium can go up or down based on this experience. This means your premium is directly affected by claims you had 2-5 years ago. Settling those claims and learning from them can help you combat the rising workers comp costs. This process takes time but you will thank yourself in the next couple years as that MOD drops lower.

Buy in to avoid the increase: If you have not placed your workers comp coverage for your business yet and are in the market, get this coverage before December 1, 2016. This is when the rate change takes place. You will still have to face the rates next year but at least this is one year you are paying 14.5% less on this policy.

Put some skin in the game: Especially if you are paying premiums in excess of $20,000 annual, Deductible plans as well as coinsurance plans can allow you to put some skin in the game and take on a little risk of your own. Some start as small as $500-$1000 deductibles but go up and the savings increases with that. It might not make a lot of sense for the smaller premium amounts but this is a good tool to help save money without putting too much of your business at risk. Pick a deductible that saves you money and you feel comfortable with.

Alternate payment options: Plans like Pay-As-You-GO can be helpful tools which allow you to pay your premium when you run your payroll. This won’t change the price but for companies that have a tough time with premiums in the slow season but still have a year round payroll, this can be a great solution.

In times like these were pricing can have such a direct impact on your business and its livelihood, Rate increases are inevitable, however taking these steps above if you are not already, could show savings of up to 25% below market for some clients but 5-10% is very obtainable for most clients. The increase in Florida is a tough one to swallow, however taking these actions could allow you to offset these increases. Speak with one of our Professional Insurance agents to learn how you can implement and benefit from some of these tools.

Commonly Misclassified Workers Compensation Class Codes

One of the most misunderstood and difficult parts of setting up a workers compensation insurance policy is classifying the type of work being done by each employee. With over 700 classifications there are a lot to choose from and some of the wording on the classification descriptions can be misleading. In most states, the classifications are written by the National Council on Compensation Insurance (NCCI). These class codes are one of the most important parts of the workers compensation policy, because they are one of the two driving factors in price or premium. The other factor determining what a business pays is the amount of payroll for the employees of that business. If the employees are not classified properly, there is a chance that upon an end of term audit for a significant difference in rate between the classifications. This can cause either a large increase in premium owed, or a refund because too much has been paid into the policy. Here are some examples of my experiences with some classification codes that are commonly misused. Hopefully this will help you as a business owner more effectively classify your business with the proper workers comp codes.

Class Codes 5606

Contractor – Project Manager – Construction Executive – Construction Manager or Construction Superintendent

In my opinion, this classification is one of the most misused of all 700 codes. This classification is designed for an employee who is in charge of a construction project, but the employee does not take part in any of the physical work whatsoever. They also cannot have direct contact with the employees doing the work. They must be talking with the foreman who then will line out the work to be done by the employees on the job site. This position is mostly work being done in the office, but occasionally will include going to the job sites to check in with the foreman’s.

Class Codes 5437

Carpentry – Installation of Cabinets or Interior Trim

Carpentry is one of the commonly mis-classified class codes when it comes to general contractors. General contractors cannot separate out this classification from other work being done. Even if the other work was done weeks prior, the contractor still cannot use this classification. It will default to the classification that has the highest risk for the work done at the job site. The higher risk typically has a higher rate of premium. This particular classification is designed to be used by an artisan (specialty) contractor. This is someone whose scope of work is only doing the installation of cabinets or trim inside of the structure. This person is not doing any other type of work on the building. It is a very specific classification and the rate for this type of work is much less than all the other construction classifications. For this reason, if a business is using this classification and it is incorrect the business will owe a very large amount at the end of the term after an audit.

Class Codes 8810

Clerical Office Employees NOC

Clerical employees are typically one of the least expensive class codes. This is for a good reason because the chances of someone sitting behind a computer being injured is very small. Since it is the least expensive classification, it is common that business owners try to classify as many of their employees as they possibly can with this code in an attempt to reduce cost. The biggest requirement for this classification is that there has to be physical separation of the clerical employee from the other work being done at the location. This separation can be a wall or even a reception desk. The other caveat of this classification is that you typically cannot use this in conjunction with any other classifications. People within the insurance industry refer to this as a standard exception class code. The standard exception class code means the employee cannot be doing any other class of work. You cannot have an employee who is classified as 5437 (trim carpenter) and then have the same employee come back into the office to be assigned class code 8810, which is a less risky class code. Some states may have certain instances where they allow this code to be split. Missouri is one such state that allows an owner to assign 10% of their payroll to the 8810 class and the remaining to the governing code. It is important to check the regulations of the state you are operating in to make sure.

Standard Exception Class Codes

As referred to with the clerical classification (8810) they cannot be used in conjunction with any other classification. There are three of these class codes that are commonly misused in this manner, 8742 (outside sales), 8810 (clerical), 7380 (delivery). Make sure that if you are using these classifications the employee is not participating in any other aspect of work being done in the company that should be classified elsewhere.

Conclusion on Class Codes

The biggest take away from this is a business owner should verify all the classifications the agent is using on the policy of their business. The insurance agent is in the business of analyzing risk. It is in their best interest to always assume more risk. This is because it is a lot easier for the agent to explain that a business over paid. This is easier than explaining that a business under paid and now they owe additional premium. Plus the insurance agent can only operate off of the information you give them about your business. No one knows your business better than you. For this reason, it is important to take an adequate amount of time to talk with your agent. Talk with them about all of the ins and outs of your business. This will help them properly protect your business.

It is equally important that part of your conversation with your agent is to talk through the class codes. Take time to make sure the class codes are being properly assigned. You can always look up class codes online as a consumer through several different sites. Most agents will be more than happy to explain why they used a particular classification. Classifications can sometimes be very tricky and it can even vary by how a particular insurance carrier views the work being done. A little research and questioning to make sure things are set up properly can end up saving you a lot of hassle. It will also save you money upon the end of term audit. For this reason, it is important to establish a comfortable working relationship with your insurance agent.

My Insurance Question is a contribution of the experts at The Insurance Shop LLC. The Insurance Shop was founded in 2005 as an independent insurance agency that partners with a couple dozen insurance carriers. This large amount of carriers allows the agents at The Insurance Shop the ability to shop your policy around in an attempt to make the carriers compete for your business. If you are looking for a better value when purchasing your commercial insurance package, let us shop insurance so you don’t have to. Give us a call today at 800-800-4864.

Overcoming Difficult Workers Compensation Situations

Often times I speak to business owners that are experiencing difficulties with their work comp coverage. Either they are being non-renewed and cannot locate an alternate option OR their renewal pricing has skyrocketed to a point they are begging for help to locate a less expensive alternative. Typically, the difficult situation is related to claims. Below is a real life situation with a business that I assisted solving their difficult workers’ compensation situation and how the changes they made within their business helped decrease their pricing in future policies. For purposes of privacy, I am using a false business name, Test Company, Inc.

When Test Company, Inc. contacted my agency, they were up against a non-renewal, no other insurance company options and had employees in multiple states. Within work comp there is a state program that is required to offer coverage even with bad claims history or a difficult industry to insure. The state workers’ compensation programs are higher rates and typically do not have a flexible payment plan so cash flow becomes an issue. Also, instead of having 1 annual workers’ compensation audit for all states with 1 company, Test Company, Inc. was going to need to complete 12 audits, 12 separate policies to monitor and make payment to. Most state policies only cover that particular state so a separate policy is purchased for multiple states when private insurance companies are not willing to quote.

Test Company, Inc. had grown from 0 to 6MM in gross receipts in 5 years and suffered several very substantial claims. Their workers’ compensation cost had increased from 200K to nearly 500K due to their claims experience generating a very high experience modification rating and the competitive companies unwilling to quote. The ownership of the business was so focused on growing, they didn’t think about how claims were going to cause this big of a problem with their workers’ compensation coverage. Claims were happening over multiple years of coverage and it finally caught up to them so they were forced to identify the problems and fix them.

Together we identified the reasons for the claims and communicated about realistic business practices that needed to be implemented to prevent similar claims from happening in the future. The employees working in the field have a constant driving exposure and when working at the customer’s home, the Techs are moving heavier items. There was a driving and lifting exposure that were causing the claims. First step was to set-up a Motor Vehicle Report (MVR) program to review the driving history of the employees in a vehicle to make sure those employees have a safe driving record. When setting up a MVR program Test Company, Inc. must establish a set of requirements that are considered “a safe driver”. Most work comp providers have resources the insured can access to help with establishing guidelines to prevent claims, ask the insurance companies “loss control department” for assistance if your agent doesn’t know. Secondly, we discussed hiring practices for Techs. Since these employees have a lifting exposure it’s important to hire employees that are strong enough and haven’t experienced injuries in the past that could lead to a large workers’ compensation claim. A pre-employment and annual physical for all Tech’s was the solution Test Company, Inc. implemented.

With a business of this size and growing, claims are going to happen. When there is a claim, what can Test Company, Inc. do to minimize the amount paid?

It’s amazing how stories throughout the process of a work comp claim happen. One of the best suggestions to prevent an employee’s story from changing is to Immediately document the injury, have the employee sign the injury report form, have a supervisor or key employee drive that employee to the medical clinic and have the supervisor or key employee sit with the doctor’s office when explaining what happened that caused the injury. Record it with a cell phone if it’s allowed and you think it’s needed. These steps will prevent a story from changing and an employee’s injury mysteriously becoming more serious than it should have been.

Return to Work Program. This particular insurance company has a non-profit program where their insureds can set-up a light duty return to work program with a local participating non-profit. Test Company, Inc. did have a work comp claim where the Return to Work Program worked perfectly. The Tech employee hurt their back, therefore, could not lift the objects within the homes they would be working on. This employee was set-up with a local non-profit where the employee sat at a table and folded towels. 2 days of doing this and the employee’s back felt better, he was released by the Doctor, the claim was closed and the employee returned to work.

When making these changes it’s extremely important for Test Company, Inc. to put them within their Employee Handbook, communicate those changes to the employees and have them sign off on a notice form. This helps set the standards for current employees and future hires.

The pricing decrease doesn’t happen overnight. The business must implement changes then experience 1,2,3 years of positive claims history proving their changes have led to a safer business to insure.

Declaration Page. What is it? Where is it? Is it important?

I am sure at some point in time you have had an insurance agent ask you for your policy declaration page or pages. If you are like most business owners, you think to yourself what are they asking me for. Basically, what these pages represent are the cliff notes of your insurance policy for that particular line of insurance. You will notice that your worker’s compensation declaration page is shorter than your business owners package or general liability. These declarations will not list all of the exclusions in your policy. It will only list the coverage limits you currently have. Here is the definition of declarations: The front page (or pages) of a policy that specify the named insured, address, policy period, location of premises, policy limits, and other key information that varies from insured to insured. The declarations page is also known as the information page. Often informally referred to as the “dec” or “dec page.”

The next thought most business owners have is, where do I find the declaration page. The declaration page or pages can be found in the front 3^rd of your insurance policy. Most of the time it’s within the first 10 pages. This is especially the case for worker’s compensation. For your general liability and business owners package policy it may be a few further pages in. The key to identifying it is when you start to see wording such as limits or premium. When you see that and how the premium pricing is broken down then you are in the right place. It will show your experience mod from the current term, premium discounts, state taxes, fees, expense constant, and a few other items on there. Some of this will vary on what type of policy it is.

This information is important to insurance agents for a wide variety of reasons. Most of the time a business owner thinks we only want to see these pages so that we can beat the price on your current policy. Yes, that is helpful information to use but it doesn’t necessarily mean that our carriers will just price it below your policy just in order to win your business. Our underwriters like to know pricing information so they can compare it to other policies that are either doing the exact same type of business or something very similar, and offer you a quote accordingly. If they generally don’t know what you are paying, then they will go on the conservative side and offer a policy that is in the average of pricing for that industry based on where they have priced and written the type of business you are doing. I feel, the most important reason for this to me is that I like to view these pages to give you an apples to apples comparison of the two policies. Also, I can check to see if you are truly covered correctly. If their may be gaps that are missing some key coverages or are underinsured in areas that you would not want to be underinsured in. Thus we can present you with a quote exactly like the one you have with the same coverage and limits. This will also enable us to present another quote option, if necessary. Typically this option is where we think your limits should be and additional coverages that you may not have that most people in your line of work have. The key to remember when being asked for your declaration page or pages is that we as insurance producers are wanting to make sure your covered correctly and at a fair price. We are here to get you a fair price, but we are also here to make sure you do not have any gaps when a claim does occur. We don’t like audit surprises or coverage gaps at the time when you think you are covered just as much as you do. The declaration page is so much more than just a price to beat.

The Importance of Accident Prevention in the Workplace

It may seem obvious that it should be the goal of employers to focus on accident prevention in the workplace. However, for those that need a little additional encouragement, here are some reasons to prioritize safety in the workplace.

Caution signs are essential to accident prevention in the workplace.

Accidents are financially expensive

Businesses exist to create profit. Most businesses are relatively low profit margin and work very hard to create that profit margin. Workplace accidents lead to extra financial expenses. They can also add costs to insurance policies through increased rates or a worse experience modification factor.

For example, if a business operated at a ten percent profit margin (which is well ahead of many businesses), they would need $50,000 in additional revenue to offset $5,000 in extra expenses created by an on the job injury. That could lead to extra hours worked by ownership, having to cut positions or hours or other difficult budget decisions.

Reduced workplace morale

There are more than just financial costs due to workplace injuries. A lack of accident prevention can reduce morale of other employees. Sometimes the morale can be reduced as a result of having to work longer hours or harder to make up for injured employees that have to miss work. It may result from financial strain on the business due to the injury. It also may arise simply because employees don’t like to see their co-workers suffer.

Recent Trends

It’s hard to argue against the importance of workplace safety. As a result, there have been recent trends by workers’ comp insurance carriers to help with accident prevention in the workplace. Carriers such as Missouri Employers Mutual, Utah Business Insurance Company and Guarantee Insurance Company offer extensive loss control services. Additionally, some carriers offered reduced cost items for workplace safety. These items include The Hartford’s Shoes for Crews incentive, incentives for a healthier workplace, weight loss programs as well as discounts on ergonomic office furniture. Missouri Employers Mutual just launched a safety grant program for their clients to help defray the costs of large one-time purchases to make workplaces safer.

Most employers want to protect their employers and focus on creating a safe workplace. Some of the reasons listed above highlight the benefit to focusing on preventing workplace accident for all employers.

Florida Small Business Owners need to prepare for Increase in Work Comp

On December 1st, rates on Workers Comp Premium are set to go up 14.5 % throughout the state of Florida. This could have a drastic impact on Florida Small Business

Approved by the Florida Office of Insurance Regulation (OIR), rates on premium for workers compensation are going to increase by 14.5 % beginning the first of December. There are the reasons for this dramatic increase and it will have an immense impact of the Florida small business community. There were two court cases ruled on over the Summer and there was a Senate Bill that caused a very small portion of the increase. The two cases were Castellanos vs. Next Door Company and Westphal vs. City of St. Petersburg. The additional part of the increase was related to Senate Bill 1402 which dealt with a a new printing of the Florida Workers’ Compensation HCPR Manual.

Castellanos vs. Next Door Company

This court case was ruled on this year and it was between a Florida small business owner named Marvin Castellanos and Next Door Company. Marvin was an injured employee who sued Next Door Company and the Florida Supreme Court overruled a previous court ruling from 2009. The previous ruling was overturned because it limited the ability of the claimant to get a reasonable amount for attorney’s fees. Pretty much the previous ruling limited the amount a judge could award for attorneys fees. As a result, most of the money being awarded in workers compensation cases was going to the lawyers to cover their fees instead of going to the inured employees who it was meant for. With this ruling in place judges merely had to use the previous fee schedule as a recommendation, but depending on the situations surrounding each case the can award more or less for attorney’s fees. Because of this ruling insurance companies anticipate they will have to pay larger amounts for workers compensation lawsuits in the future. For this reason they asked for and were approved by the Florida Office of Insurance Regulation (OIR) a 10.1 percent on average statewide.

Westphal v. City of St. Petersburg

The next case that had a negative impact on workers’ compensation rates in the state of Florida was Westphal vs. City of St. Petersburg. This case was regarding the 104-week statutory limitation on temporary total disability benefits. This time period was ruled unconstitutional. In its ruling the court stated the previous time period denied injured workers the ability to obtain proper right of access to the courts. The ruling extended this time period to 260 weeks. Because injured employees will now be receiving partial salary benefits for an additional 156 weeks insurance companies were taking on additional risk to offer workers comp coverage within the state of Florida. For this reason the OIR approved an average increase of 2.2 percent statewide.

Senate Bill 1402

The additional 1.8 percent increase on premium for workers’ compensation was related to updates within the Florida Workers’ Compensation HCPR Manual. This increase was approved as part of Senate Bill 1402.

What can business owners do to protect their business?

Shop your policy

The first thing a Florida small business owner should do when they get sticker shock from their renewal quote is to shop their policy around to different agencies. One thing that can save you a lot of time doing this is to partner with an independent agent who has the ability to shop your policy with many different carriers. A lot of agencies have exclusive relationships with only one or a select few carriers. This dramatically impacts the amount you pay in premium, especially if you are in a difficult to quote class code. A typical independent agent can quote your policy with 10 or more insurance carriers. This gives them the ability to negotiate more effectively for more comprehensive coverage and better rates on premium.

Pay as You Go

Pay as You Go Workers’ Compensation is a flexible payment option that allows business owners to get coverage in place at a much lower price and allows them to pay their premium monthly based on the payroll each month. This is an excellent option for cash strapped or seasonal businesses.

Broker of Record vs Agent of Record

Before you sign a Broker of Record (BOR) or an Agent of Record (AOR), here is what you need to know.

A BOR is a broker of record notice and an AOR is an agent of record. A Broker of Record is an agent designated by the policy holder to represent and manage the policyholders insurance policy. Now before I move forward let me ask a question. Does anyone work for free? Does anyone complete a job for a customer, but then the funds go to a competitor or a different local business? No that doesn’t typically happen. Except in the insurance industry. Let me also follow that up by saying I enjoy the customer service that I give everyday. By no means, do I think that every person coming to me for insurance will decide to let me handle their insurance needs.

Marketing, Financial, Insurance, Broker

Here is another scenario that may give you a better understanding of the Broker of Record (BOR) process and what it exactly means. Let’s say a business owner decides their renewal rates for workers compensation or general liability insurance just can’t be the best out there. So what does the business owner do? They can start calling other agents? I am assuming they call other agents because they either assume their agent has already looked for a renewal and can’t do any better. They may assume their current agent simply does not have the access to other more competitive markets. But do they call and ask them to shop for better rate’s?

The first thing a business owner should do is jump on their own computer and search workers comp insurance (let’s keep to work comp). So here they are talking to an agent that is going to get all of the company information. Then this agent will shop all of the markets they have for this businesses particular industry. On average submitting to 3-6 markets. Then presenting that business with new applications to sign and a shiny new quote with not just a better price but a better rate per 100 in payroll. Most business owners are are so happy that they are saving money (hopefully a lot), but even if it’s only a little hey every penny counts right. At this point most business owners will call their current agent and telling them some similar to, I’m not renewing my policy with you. I found a better price. At that point the business owner has the agents attention! At this point the agent decides to start submitting to all of the insurance carriers they are appointed with. The agent will do this in order to see if they can match or beat the pricing you got from the other agent (me). This may not be because they were not doing their best work for you in the first place. It may be you were not clear to them what your priority was to begin with. Agents speak with many business owners with many different priorities. Some just want a quote, quickly so they can get back to their business. Others do not mind waiting to get the absolute best deal.

Here is how I imagine the next scenario goes. The current agent that most likely wants to keep your business will ask what carrier is offering better pricing? The business owner may tell them who the carrier is and the current agent will say, oh I am appointed with that particular carrier. I can get you those rates. The current agent would then asks you to sign a BOR or AOR letter, letting them take away the work they did for the business.

I understand this is an imperfect situation, but this is the name of the insurance agent game. So the next time you are shopping take into consideration the time, effort and work the agent you called for help put into saving you money before you sign a Broker of Record (BOR) letter.

My Insurance Question is a created by the experts at The Insurance Shop LLC. The Insurance Shop was formed in 2005 and over the course of more then a decade the agency has developed relationships with more then two dozen carriers. This vast amount of carriers allow their agents to acquire the best value when shopping for commercial insurance. If you are ready for a new look at your coverage, give us a call at 800-800-4864.

6 Tips for controlling the cost of a Workers Compensation Claim.

Quickly report all claims to the insurer.

Some states have requirements for how quickly a workers compensation claim must be reported. Insurance carriers have specific departments that deal with claims exclusively. They will know the process thoroughly for filing a workers’ compensation claim. Because this is a process your business hopefully does not deal with frequently, getting your injured worker the proper coverage quickly will be easier with the help of your carrier. Documenting the claims allows the carriers to pick up on patterns and help businesses develop programs to prevent common injuries.

Make sure supervisors are adequately trained.

Taking care of an injured employee may not be at the top of the priority list when hiring a manager for your business. Hopefully it is not something your managers have to encounter very frequently, but it needs to be something they can effectively deal with for the success of your business. Many businesses have a point person who studies the workers compensation claim process thoroughly. It is still important to have this person train the other managers to be aware of this process in case of an incident occurring when they are not on duty or away on vacation.

Communicating with your employees is important to limiting the impact of a workers compensation claim.

Keep complete notes of the injury and reporting process.

Note taking is crucial in everything you do within your business. This is especially important when you experience a workers compensation insurance claim. It may seem tedious, but it can save your business immensely if a claim makes it into the court of law. Besides the fact you need to cover your business legally, accurate documentation helps your carrier document injuries within your industry. They can use this information to see patterns and to determine appropriate safety programs to deal with those patterns.

Communication is key.

Communicating with all parties involved in the workers compensation claim is extremely important. This starts with communicating with your employee. In most states they have the right to seek a second opinion, but the more you keep your carrier in the loop of these situations the better they can help you control the cost of the claim. Separate from the cost of the claim, it is in your best interest to let your injured employee know you care about their well-being. Communicating with both your insurance agent and carrier is important as well. The carrier is the one equipped to handle the claim, not your agent. The agent can be helpful if you feel your carrier is not living up to your expectations. Keeping them updated on the workers compensation claim can help you ensure you are getting the proper attention from your carrier and they can help you prepare for explaining the claim when you go to renew your policy.

A proper safety program can prevent employee injuries and limit a workers compensation claim.

Prevent employees from injuries.

Safety programs are key to the long term success of your business. Making a safety plan part of your ongoing training is essential to your business and it does not have to take a lot of time. Fifteen minute discussions two or three times a month should be sufficient. Make sure the meetings have a specific topic and ask for feedback from your employees. Asking for their feedback gets them involved in the discussion. This will make them more involved in the program. It can lead to higher job satisfaction if those employees feel like you are listening and make changes based on their feedback.

Create a return to work program.

Studies have shown that the quicker a person gets back on the job in any form or fashion, the more likely they are to return to permanent work. Humans are creatures of habit. Coming to work is part of their habit and the longer they go without that habit the more likely they are to create new habits not associated with your business. This is when a claim can get out of control if an injured employee goes on long term or permanent disability. Designing low impact work of some kind will allow those employees to return to work and get back in the routine of work quicker.

10 terms to help you navigate the Workers Compensation System

Previously we wrote about several common terms related to commercial insurance here. These were terms that a business owner should familiarize themselves with before renewing any commercial insurance policy. especially before interacting with their states workers compensation system. Here is a list of terms you might come across related specifically to workers’ compensation insurance. Some of the terms may not have to do with your renewal specifically, but if you use the workers comp system long enough you very well may come across some or all of these terms.

Aggravation: Aggravation usually implies a fresh incident producing additional impairment to a previously injured anatomical region. Aggravations are usually not temporary.

Carrier Code: The ten-character code that identifies a specific insurance carrier. W is always the first character in the code for a carrier of Workers’ Compensation policies. The codes for carriers of Disability Benefits insurance always begins with the letter B. Carrier codes are issued by the Finance Office of the WCB.

Claims administrator: The term for insurance companies and others that handle your workers’ compensation claim. Most claims administrators work for insurance companies or third party administrators handling claims for employers. Some claims administrators work directly for large employers that handle their own claims. Also called claims examiner or claims adjuster.

Date of Injury (DOI): If the injury was caused by one event (a specific injury), this is the date of the event. If the injury was caused by repeated exposures (a cumulative injury), this is the date that the worker knew of should have known that the injury was caused by work.

First Report of Injury: Each state has their own form that should be filled out anytime an injury occurs on the job. They should be reported no matter how minor the injury is. Insurance carriers track these forms to look for patterns of injuries and to help employers prevent injuries from becoming more severe or more common. Here is an example of one of these forms from the state of Wisconsin.

Functional capacity evaluation (FCE): An FCE is a series of tests administered to a workers’ comp claimant by a physical therapist or other health care professional. They can be beneficial in determining an injured worker’s capabilities and restrictions.

Independent Medical Examination (IME): Am IME is a medical evaluation that is used to resolve questions about your medical condition, including what treatment is necessary and the degree of your permanent impairment, if any. An IME is most often requested by the insurance company when there is a question about what treatment you need or what permanent disability rating you should be given.

Loss Ratio: The relationship of incurred losses compared to the earned premiums expressed as a percentage. If, for example, a firm pays $100,000 of premium for workers compensation insurance in a given year, and its insurer pays and reserves $50,000 in claims, the firm’s loss ratio is 50 percent ($50,000 incurred losses/$100,000 earned premiums).

National Council on Compensation Insurance (NCCI): NCCI is a U.S. insurance rating and data collection bureau specializing in workers’ compensation. Operating with a not-for-profit philosophy and owned by its member insurers, NCCI annually collects data covering more than four million workers’ compensation claims and two million policies.

Workers’ Compensation Audit: A review of the compensation paid during the policy term to determine whether the exposure used to determine the original premium was accurate. If during the policy term, the actual exposure changed from the original estimate of what it would be, then an adjustment to the premium would be made at the time of the audit. If there was more exposure than the estimate indicated, then more premium will be charged. If there was actually less exposure than the estimate, premium will be refunded.

3 ways to managing risk in the Non-Profit Industry

There are many reasons why people go in to the non-profit industry. Some people want to fight poverty, some work closely with a church and others might be dedicated to fighting a disease. One common theme among people who work in the non profit industry is that they want to be a part of something greater than themselves. One thing many people in this industry do not anticipate is having to manage risk, but this can be one aspect of their job that can ultimately determine the success or failure of the organization.

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Many people who go in to this sector do not anticipate having to manage risk or buy insurance. They probably do not anticipate their jobs causing them to have to worry about things like a return-to-work program, workers’ compensation benefits or general liability insurance. As a non-profit professional, how effectively you handle these aspects of your organization will contribute immensely to the success or failure of your organization. For that reason we have created three main tips for managing risk within your non-profit agency.

Have an effective safety program in place.

Having an effective non-profit safety program in place is essential for all non-profit organizations. Most non-profits depend on people volunteering their precious time and money to the organization. The last thing you want to happen is for a volunteer to be injured while helping your organization. A safety program can prevent this from happening.

First and foremost, reporting and documenting injuries needs to be a part of your company culture. It should start with the first training all employees get during the on-boarding process. Employees need to be well aware of how to inform volunteers how to properly do their job in a safe manner. This can go hand in hand with your business’s safety program and your business’s safe driving program. Another thing to keep in mind is that how safe your organization takes safety starts with you and your key employees. If you stress safety as the professional, your employees and volunteers will also value this safety program.

Non Profit Insurance Answers

When should a new or small non-profit decide to purchase insurance?

For a new non profit, insurance may not be necessary at first, but it is not something to be taken lightly. No matter what the financial situation is of an organization, the quickest way to fail as a non-profit is to not secure adequate insurance. Your state laws will determine when you must purchase coverage. Workers’ comp and general liability are typically the first two policies you will find a need for. Workers comp protects your employees and general liability protects your organization from damages to third parties. Even if you are fairly sure you have proper coverage or do not need coverage at this time, consulting with an insurance professional with whom you trust is a very wise decision. If you know someone who works in risk management or insurance, it might be a good idea to ask them to sit on your board of directors.

Have a return-to-work program in place for injured employees.

Operating an effective return-to-work program is another aspect that will contribute immensely to the success or failure of your organization. Ideally you will never have a need for a return to work program because none of your employees will ever be injured on the job. But as you very well know, we do not live in an ideal world. For that reason it is crucial for you to prepare for the day when you do have an inured employee. If you are prepared, you will be able to get those employees back on the job quickly and control the cost to your organization. Any work you have to get the injured employee involved in the organization will benefit the injured employee and your organization in the long run. Getting people back on the job quickly is important because the quicker they are back on the job the more likely they are to not become an injured worker long-term or permanently.