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Monthly Archives

January 2011

HOW TO CHOOSE THE BEST HEALTH INSURANCE

By Life and Health

It is very difficult to evaluate what Health insurance plan is the best fit for you if you don’t have a basic knowledge of insurance industry lingo and terminology. An insurance provider can describe the various insurance plans ad nauseam, but unless you understand the technical terms, you are not likely to be any wiser by the end. The following are some of the most commonly used and important Health insurance terms:

Exclusions: The services that will not be covered under a Health insurance policy. Exclusions vary per provider, but cosmetic surgery, experimental treatments, or home care would be examples of common exclusions.

Co-payment: The fixed out-of-pocket amount that you will pay for each medical service or prescription before the Health insurance provider begins to pay for the service or prescription. This amount will also vary per policy, but usually range from $10 to $50.

Co-insurance: The percentage of the total cost that you will pay for a medical expense. Co-insurance may be in lieu of a co-payment or in addition to it. It also varies per policy, but a common arrangement is 20% patient payment and 80% insurance provider payment.

Deductible: The amount of out-of-pocket money you will pay before any health care expense is paid by the Health insurance provider. The annual deductible can be anywhere from $500 dollars to thousands, depending on what type of insurance plan you choose.

Coverage Limits: The pre-set monetary amount that a Health insurance plan will cover. Once you incur medical expenses past the limit, you will be responsible to pay the entire amount out-of-pocket. (Note: the Obama health care reform includes phasing out annual coverage limits by setting annual limits no lower than $750,000 this year, $2 million in 2012, and completely prohibiting them in 2014.)

Premium: The monthly payment amount that you pay to your Health insurance provider to continue coverage.

Out-of-Pocket Maximums: The point where your payment obligation ends and the health insurance company pays all future covered medical costs. These maximum out-of-pocket expenses can be applied to a particular benefit section or the all the policy benefits.

How to Determine What Health Insurance Plan Is the Right One

Health insurance coverage should be based on individual need and monetary resources. Cost is obviously a huge consideration, but luckily consumers have a lot of health care plan options. The cost of a health care plan will vary based on the benefits it provides and what insurance company is providing it. Exclusions, coverage limits, deductibles, etc. will all impact the monthly premium amount.

At the same time, a policy is virtually worthless if it fails to cover your expected medical needs; for example, if you expect to become pregnant, but the coverage excludes maternity, it probably will not be a very beneficial plan for you. There might also be certain known medical needs, such as prescription medications, mental health needs, immunizations, home health, therapy, eyeglasses, or preventative care, that you would want to ensure are covered in whatever Health insurance policy you choose. Always understand the benefits a plan offers before signing on the dotted line.

Lastly, you should make sure that the plan is offered by a reputable Health insurance company. It is also beneficial if the company has a professional insurance agent available. The insurance agent can best apprise you of all of your health care coverage options, help you determine what plan best encompasses your financial and medical need, and answer any policy-specific questions you might have.

MOST HOMEOWNERS PLANNING LARGE PARTIES DON’T HAVE ENOUGH INSURANCE COVERAGE

By Personal Perspective

If your Super Bowl Sunday plans include throwing a party, you’d better be sure you have adequate insurance in the event of an injury claim by one of your guests. This advice stems from a new study sponsored by Trusted Choice, the independent agent’s branding campaign launched by the Alexandria, Virginia-based Independent Insurance Agents & Brokers of America.

The study was conducted by TRC, an independent research company in Fort Washington, Pennsylvania. The researchers polled 1,009 adults in a telephone survey about their plans for a social gathering. Their research revealed that of 28.5 million Americans who plan to have parties in their home, 21 million do not have a Personal Umbrella insurance policy, making them vulnerable to lawsuits, which could result in financial ruin. The remaining seven million didn’t know what coverage they currently carried.

The importance of proper coverage cannot be underestimated because in 30 states, hosts can be held legally responsible for guests who drink, drive and cause an accident. Interestingly enough, 53% of those surveyed said the host should be held responsible; however, most of those who responded in this manner have not taken any steps to protect themselves. The researchers concluded that people don’t buy Umbrella policies because they think enough coverage is offered by their Homeowner and Auto policies. Nothing could be further from the truth. Large jury awards coupled with substantial health care costs make it commonplace for lawsuits to exceed the liability limits on the average Homeowner/Auto policy.

The researchers made the following recommendations:

  • Discuss your insurance coverage with one of our agents before hosting a party to familiarize yourself with your state’s host liability laws, and to make sure you are insured properly.
  • Limit invited guests to people you know.
  • Host the party at a restaurant or bar that has a liquor license, rather than in a home or office.
  • Be sure that you provide filling food for guests and alternative nonalcoholic beverages.
  • Schedule entertainment or activities that draw partygoers away from drinking.
  • Arrange transportation or overnight accommodations for those who should not drive.
  • Stop serving alcohol at least one hour before the party is scheduled to end.
  • Do not serve guests who are visibly intoxicated.
  • Consider hiring an off-duty police officer to monitor guests’ sobriety discreetly or handle any alcohol-related problems as guests leave.

STUDY SHOWS DRIVING WHILE DROWSY IS DANGEROUS

By Personal Perspective

The Prevalence and Impact of Drowsy Driving, a brand new study by the AAA Foundation for Traffic Safety, indicates that two in every five surveyed drivers admit that they have fallen asleep at some point in time while driving. Of those drivers responding in the survey, more than a quarter admitted being so sleepy as to have had difficulty keeping their eyes open during their past month of driving time.

The study was partly based on the responses that 2,000 Americans gave to telephone surveys. According to the responses, researchers found that one in ten drivers reported falling asleep in the past year of driving. The researchers pointed out that one of the biggest mistakes made by drivers is simply underestimating just how tired they really are and overestimating their capability of dealing with tiredness while driving.

Another portion of the analyzed data was derived from crash data that the National Highway Traffic Safety Administration (NHTSA) collected during 2008 and 1999. From this data, researchers estimated that 16.5%, or around one in every six fatal road and highway crashes, involved someone driving while drowsy. More than half of all driving-while-drowsy accidents involved a single vehicle leaving its appropriate traveling lane. It further found that lane departure accidents were almost seven times more likely than other types of drowsy driver crashes. Thirteen percent, or around one in every eight road and highway vehicle crashes, required hospitalization. Other interesting statistics among crash-involved drivers include:

  • Men were 61% more likely than women to have been drowsy.
  • Drivers younger than 25-years-old were 78% more likely to be drowsy than their counterparts older than 40-years-old.
  • Solo drivers were 81% more likely to have been drowsy than those with a passenger.

Researchers say that the main component is attitude, as there seems to be an overwhelming number of drivers who are indifferent or complacent about driving safety.

In relation to travel, experts suggest starting off early and getting a good night’s sleep instead of starting extended travel following a regular work day. Using common sense about driving and tiredness is also recommended. If you’re tired, don’t start driving. If you become tired while driving, do whatever necessary to remove yourself from the roadway.

WILL YOUR INSURANCE PROTECT YOU FROM A FACEBOOK LAWSUIT?

By Personal Perspective

Most everyone knows that the use of social media has grown by leaps and bounds during the past decade.

What many people don’t realize are the unique risks associated with social networking.

Anyone using Facebook, MySpace, LinkedIn, or other social networking sites should exercise extreme caution in what they decide to say online.

As an example, in 2009 a teenager in New York sued some of her classmates and their parents, accusing the classmates of bullying and humiliating her in a Facebook Forum. Whether or not the allegations are true, the teenagers and their parents require legal resources to pay for the possible judgments against them.

Many people believe a standard Homeowners insurance policy will cover them in such a situation. In fact, it probably will not provide the necessary coverage. A standard policy covers bodily injury or property damage done to someone else. It defines bodily injury as sickness, harm or disease, and it defines property damage as destruction of or injury to physical property. Neither definition includes publishing or saying something that injures another person’s reputation. Hence, the policy is not likely to cover a Facebook post. In other words, the policy is unlikely to cover the act of making someone else feel miserable due to social networking.

A good source to consider for additional coverage is a Personal Umbrella policy. This kind of policy provides additional insurance in circumstances where a loss has depleted the amounts of Liability insurance offered under a Homeowners policy. Umbrella policies usually have a deductible of $250 to $500; but have the potential to protect the policyholder from financial devastation.

As you become more exposed to risk through social networking, choose your words carefully on any social networking site. Additionally, speak with our insurance professionals to see if an Umbrella policy is a good match for your insurance needs in an increasingly risky world.

IS YOUR BUSINESS IN THE RIGHT INSURANCE CLASS?

By Business Protection Bulletin

Every business owner who has ever received a bill for an insurance premium has wondered how the insurance company came up with the price, especially if the premium has gone up since the last renewal. Although the insurance pricing mechanism can seem mysterious, and might involve a certain amount of discretion by underwriters, the starting point is always the same: The underwriter must answer the question, “What type of business is this?”

That might appear to be a simple question, but it does not always have a simple answer. When the underwriter answers the question, they assign the business to one or more classifications; more than any other factor, these classifications determine how much premium the business will pay. Classifying a business can be straightforward or it can be more art than science. Most state Workers Compensation insurance manuals contain roughly 700 classifications; the Commercial General Liability insurance manual has a little less than double that. Compare those numbers to the thousands of business types that exist today and the new ones that will exist five years from now, and you get a sense for why classifying a business can be tricky.

In addition, while Workers Compensation, General Liability and Property classification descriptions are similar in some cases; in many others they bear no resemblance to each other. The underwriter who knows that they’ve correctly classified the business for one type of policy might find that classification to be of no help for the others.

Although it might appear that determining the correct classification is only the underwriter’s problem, it also has short- and long-term effects on the insurance buyer.

The correct classification ensures that the buyer pays the appropriate rate and that all buyers in that classification receive fair treatment. If the classification is incorrect, the buyer will pay a rate that is either too high or too low for that type of operation. For example, compare two contractors — one installs plumbing systems in commercial buildings, the other installs automatic sprinkler systems in them. If the plumber’s work is faulty, a pipe might leak and cause water damage to furniture and equipment in one or more rooms. If the sprinkler contractor’s work is faulty, the sprinklers might not work when a fire breaks out and the fire might destroy the entire building. The risk of a severe loss resulting from completed operations is much higher for the sprinkler contractor than it is for the plumber. If the underwriter classifies the sprinkler contractor as a plumber, the sprinkler contractor pays a much lower rate for completed operations coverage than it should. In the long term, loss experience will cause the rates for plumbers to increase. This is unfair to plumbers and to sprinkler contractors whose underwriters classified them properly.

Also, charging an inadequate premium might cause the business’s experience modification to be higher than it should have been. The experience rating formula compares actual losses to the losses a typical business in that classification with that level of payroll or sales would have. If the classification is wrong, the formula will understate the level of expected losses, resulting in a higher debit or lower credit.

The rating manual rules require that policies issued to businesses in some classifications carry specific endorsements (policy changes). For example, the rules for restaurants require the company to attach an endorsement that changes the definition of the products-completed operations hazard. Use of the wrong classification can result in the wrong policy terms for the business. A business owner should work closely with one of our professional insurance agents to ensure that insurance companies are using appropriate classifications. Although the wrong classification might appear to save the business money in the short run, it can prove to be costly in the long run.

WHEN TRAGEDY STRIKES: ELEVEN TIPS FOR YOUR WORKPLACE RESPONSE

By Business Protection Bulletin

National Tragedy Affects The Workplace – Many national tragedies are first learned about while people are at work. Just imagine how many people learned of the September 11th attacks or the assassination of President Kennedy while going about their workday. When such events occur, employees gather around computer screens and televisions to watch the events unfold. They share information, sorrow, and concern; look out for each other; and try to empathize or understand how the tragedy affects fellow co-workers and associates. Workers might simply be at a complete loss about what to do.

Personal Tragedy Affects the Workplace – Personal tragedy, such as an employee, co-worker, or family member’s death or illness; an employee filing bankruptcy, or incidences of home or workplace violence, also commonly have an effect in the workplace. These personal tragedies are typically less public than national tragedies, but there’s still the same sense of wanting to help and not being sure what to do.

Regardless of the type of tragedy, it usually has a substantial impact on workers. There are organizations that provide a support system to help people cope with tragedy and the helplessness and grief that often follows. There are also actions that employers can take to help employees as they experience tragedy in the workplace:

Ensure Safety. In cases where the incident occurs in the workplace, safety is the primary concern. The disaster plan should be implemented immediately. Be sure that the disaster plan includes emergency evacuation routes and a designated meet-up location. Be sure to account for the safety of all employees with an attendance call at the designated meet area.

Assess For Personal Involvement. Offer time off, transportation, moral support, assistance getting more information, and such if the tragedy affects a worker on a personal level. There might also be a need for shelter, compensation, or relocation if the tragedy is something that impacts the workplace on a widespread level, such as a local natural disaster.

Be Understanding. Naturally workers can’t instantly return to everyday work after hearing about a tragedy, or at least not in a productive and safe manner. Distracted and distraught workers are very likely to make errors and poor decisions. So, be understanding and tell the workers that it’s okay to focus their attention on what’s happening. In doing so, workers can resume work safely once their need for information is met.

Offer Information. Information can help workers process whatever is going on. If possible turn a radio, television, or computer into an information portal for the employees to stay informed. This might be confined to a break room only, but it’ll still be an information source. Keep employees as up-to-date as possible, without divulging confidential information. Do recognize that employees might want to call friends and family to gain or share information.

Offer a Talking and Gathering Location. Some find comfort in being close to others during a tragedy. A quiet conference room can provide just such a gathering point. It might also be helpful to provide employees an opportunity for interaction, sharing of grief, encouragement, and support by bringing a lunch for employees to eat in a central location. Encourage a brown bag or potluck lunch for the next few days, as some might take longer than others to share their suffering.

Have a Meeting to Share Information. Regarding personal tragedy, it’s crucial that confidentiality isn’t compromised. Keeping that in mind, it’s important to offer as much factual information as permitted. This will not only keep the rumors down, it’ll also mean that employees will spend less time seeking information from other sources. The meeting might also include how employees or the company can help those involved in the tragedy.

Offer Ways to Help. As evidenced by the overwhelming amount of people that volunteered after Hurricane Katrina and 9/11, many take comfort in easing the pain of others and helping to solve issues. Depending on the context of the tragedy, a company fundraiser event, blood drive, charitable donation, offering of flowers or food, and such might be applicable.

Encourage Employees to Utilize Resources. Make sure that employees are aware if there’s an Employee Assistance Program or counseling through the company health plan available.

Have HR Staff and Managers Available. These staff members are critical during a tragedy and should be visible and available. It’s helpful for key staff members to be seen in all work areas and stop to listen and support those that need it.

Be Prepared. All companies should have a disaster plan that includes plans for any disaster that could occur in the area – fire, earthquake, tornado, hurricane, etc. Every employee should be trained to know appropriate disaster and personal injury actions. It’s too late to make the plan once the disaster has occurred!

Include Grief Training As Part the Training Program. Many are unsure what actions to take after a tragedy; for example, employees might be unsure what to say or do once a widowed worker returns to work. Employees should have grief training that includes such points as the stages of grief, dealing with self-grief, and grief of others. Having this training will help support positive workplace morale and decrease the long-term effects of tragedy.

Everyone will experience some sort of tragedy at some point in life, and those tragedies are very likely to find their way into the workplace. Hopefully, these tips will offer an effective starting point for employers to address tragedy as it unfolds in the workplace.

FIVE QUESTIONS TO DETERMINE YOUR BUSINESS INTERRUPTION EXPOSURE

By Business Protection Bulletin

The September 11 terrorist attacks caused immense loss of life, human suffering, and property destruction, particularly at the World Trade Center in New York City. The insurance losses from injuries and property damage were very large. However, the losses resulting from businesses in the area having to shut down for extended periods of time were huge. Businesses filed nearly 5,500 business interruption claims for more than $12 billion following 9/11. For many organizations, the loss of income coupled with continuing expenses after a fire or other disaster can be even more devastating than the damage itself. To increase the chances that a loss will not shut operations down permanently, organizations must assess their exposures accurately by asking some questions.

  1. What is the most the organization could lose from a shutdown? Commercial Property insurance policies define “loss of income” as the sum of the expected pre-tax profit or loss and necessary continuing expenses. For example, if the expected profit is $300,000 and necessary continuing expenses are $100,000, the potential loss of income is $400,000. To calculate their exposure to business interruption losses, organizations should refer to their balance sheets, profit and loss statements, and cash flow statements. Insurance companies also have worksheets available to assist with the calculation.
  2. How much insurance should be carried? Once the organization knows the dollar amount of its exposure, it must decide how much Business Interruption insurance to buy. The key considerations are the length of time the insurance is likely to apply and the coinsurance percentage the organization must meet. Coverage usually begins 72 hours following the damage to the property and ends when business resumes at another location or when the building should be repaired with reasonable speed, whichever occurs first. If the organization decided that the coverage period would be around six months, it could buy an amount of insurance that would satisfy a 50% coinsurance requirement. If the interruption would last longer, higher coinsurance percentage and limits would be necessary.
  3. How long will it take business to return to normal? Even after operations resume, it could be some time before revenue returns to normal levels. Customers who had gone elsewhere during the shutdown might be slow to return. The standard insurance policy extends coverage for 30 days after operations resume, but some businesses might need more time than that, especially if their businesses are seasonal. For example, a seaside restaurant in New Jersey that makes most of its profits during the summer will need additional coverage even if it can re-open in November.
  4. How much of the normal payroll expense will continue during the shutdown? The organization will need the continuing services of some employees while it attempts to re-open, but other employees might not be necessary. For example, accounting staff will be needed to pay mandatory expenses such as property taxes and collect receivables earned before the shutdown. Employees who stock shelves will not be needed if there are no shelves to stock.
  5. Does the business depend on other businesses for revenue? A business can suffer a loss even if its own building is untouched. A loss that shuts down a key customer or supplier or damage to nearby property that causes authorities to close off access to the street can devastate a business’s bottom line (this happened to many businesses affected by 9/11). Special insurance coverage is available to protect against this possibility.

Our professional insurance agents can help you answer these questions and identify insurance companies that can meet coverage needs. With some effort and planning before a loss happens, an organization can emerge from a shut down and return to profitability.

BREAK THE CYCLE OF WORKPLACE ACCIDENTS WITH EFFECTIVE ACCIDENT INVESTIGATIONS

By Construction Insurance Bulletin

You’ve heard the old adage about people not learning from history being doomed to repeat it? This is certainly applicable to the safety programs of businesses. If accidents are to be avoided, the business must learn how and why they happen in the first place. It’s only through this knowledge that businesses can prevent such accidents from recurring.

An accident investigation should be devised in a manner that will gather information thoroughly and objectively, not assign blame or point fingers carelessly. Accidents are rarely the result of one solitary causative agent. In fact, they generally involve a multitude of direct and indirect factors that result in human failure, mechanical failure, and/or poor work environment. Once a thorough investigation is completed, the business should effectively be able to develop new training and safety protocols to prevent the same incident from happening again. Here are 10 tips to assist you in conducting an investigation into an accident:

  1. Always make sure any injured individuals receive appropriate first aid treatment and medical care.
  2. Don’t disturb the area where the accident took place.
  3. Secure the accident area.
  4. Ensure the site is safe before beginning an investigation, but begin the investigation as soon as it is safe to do so to make sure that evidence hasn’t been disturbed and the incident is fresh on the minds of witnesses.
  5. The safety program should define employee protocol for dealing with an accident site.
  6. The safety program should also have an investigation guideline and checklist to ensure proper protocol adherence.
  7. Materials needed to conduct an investigation should be readily available – camera, video recorder, personal protective equipment, notepads, pens and markers, accident and incident forms, checklists, measuring tape, evidence containers, and so forth. These should be used to document the site of the accident thoroughly, gather and record information, and preserve evidence.
  8. All witnesses should be documented immediately and interviewed as soon after the accident as possible.
  9. Anyone who used the equipment involved or that was near the accident scene just before or after the accident should also be documented immediately and interviewed as soon as possible.
  10. Objective questions should be asked in a manner that will give a comprehensive snapshot of the accident, events leading up to the accident, and the conditions of the environment surrounding the accident. This should include supervisory instruction, equipment condition, work protocol, weather conditions, and such.

From the above, the business should be able to analyze the collected information and evidence and determine how and why the accident occurred. From there, the business will be able to create or adjust safety and training protocols to prevent future accidents.

UNDERSTANDING A BUILDER’S RISK COINSURANCE CLAUSE, COMMON MISTAKES, AND PENALTIES

By Construction Insurance Bulletin

Coinsurance clauses are commonly found in a Builder’s Risk Completed Value policy. As one might deduce merely from the name, a coinsurance clause involves the policyholder becoming a co-insurer of the risk of loss with the insurer. In other words, certain conditions would result in the insurance company not paying the total amount of loss, thereby leaving the policyholder to bear the remainder of the loss amount. The insured and the insurer jointly assume the risk.

Those unfamiliar with such a clause are probably wondering why any policyholder would even consider a coinsurance clause. The benefit of buying an insurance policy with such a clause is that the policyholder will usually have relatively low premiums compared with similar policies that don’t contain a coinsurance clause. That said, anyone considering a coinsurance clause should understand what it entails and requires, so that they aren’t taken by surprise with penalties should a loss occur.

A typical coinsurance clause found in a Builder’s Risk Completed Value policy will say that the insurer will not pay more for any loss than the proportion that the limit of insurance bears to the value of the structure described in the declarations as of the structure’s date of completion.

The way a coinsurance clause works with the policy limit is often a source of confusion for policyholders. Take a loss of $20,000 with a policy limit of $100,000 for instance. It would superficially appear as though the insurer would be responsible for the total loss. However, once the coinsurance clause is figured into the equation, the insurer might not be responsible for paying the total loss amount. This will depend on the policyholder maintaining enough insurance to avoid the coinsurance penalty.

If the coinsurance is applied, it might look something like this: Still using the $100,000 policy and $20,000 worth of damage from above, the completed value of the project will be determined as $120,000 at the time of loss. The value of the $100,000 policy is only 80% of the $120,000 actual value of the project. So, the insurer is only responsible to pay $16,000, which is 80% of the $20,000 worth of damage.

Anytime the policyholder receives a lesser sum than what the full value of the claim is because of a shortfall between the completed value of the project and the policy limit, it’s termed a coinsurance penalty. The discrepancy between the two numbers can be the result of a number of mistakes made by the policyholder. Policyholders often make the mistake of failing to report when expected costs are surpassed. Any increased completed value must be shown in the policy limit when costs overrun original figures. The best way to make sure the policy limit is updated is by keeping your insurance agent apprised to the overruns so that the appropriate changes can be made.

All too often a policyholder makes the mistake of setting their limit of insurance based on the amount of the construction loan for the structure. Most of the time, the completed value of the project is greater than the amount of the construction loan. An example would be a significant portion of a building project being funded by cash, but not computing the cash amount when totaling the completed value. If the insurance is only for the financed amount, then the policyholder will suffer a coinsurance penalty for any losses.

Another common mistake occurs when the policyholder doesn’t include profit and overhead in the completed value. These are generally figured at 10% for each. If not accounted for, this can cause a substantial coinsurance penalty.

Sometimes, it’s what shouldn’t be included that could lead to problems. Land value, excavations, and underground work, for example, shouldn’t be included in the completed value. These aren’t covered losses on typical policy forms. So, the policyholder would just be paying additional costs for items that wouldn’t be covered during loss.

DEPARTMENTAL RESPONSIBILITY TO REDUCE WORKERS COMPENSATION CLAIMS

By Construction Insurance Bulletin

When it comes to Workers Compensation claims, companies are looking constantly for ways to reduce claims and reduce costs.

Ascribing the cost of Workers Compensation claims to applicable internal departments can encourage supervisors and managers to pay more attention to training and safety programs and more carefully monitor injured employees returning to work. Some companies have even deducted the claim cost from the budget of the ascribed department instead of a general company fund as an additional incentive to curb Workers Compensation costs. Through implementing a few procedures that place Workers Compensation expenses directly on internal departments, employers have more control over prevention and injury management measures that can decrease the severity and frequency of workplace injury. The reduced claims and Workers Compensation premiums add up to a substantial amount of savings.

Safety goals can be met by communicating directly with all potential Workers Compensation employees. Use a claim and injury history to identify high-risk employee groups. Then, on a departmental level, discuss the injury management process with employees. Communication will improve as employees are given a chance to discuss how they feel the job could be performed with less risk of injury. It also gives the employer an opportunity to modify safety procedures or dangers in the work environment, such as faulty equipment or inadequate work protocols that are identified by employees.

A common problem related to workplace injuries is a lack of prompt reporting. Too often supervisors don’t appropriately acknowledge workplace accidents. The hope is that the incident will not result in time off of work or medical expenses. However, putting an initial injury off and not reporting it immediately often actually results in increased costs. Managers and supervisors need to know that they aren’t saving money when they don’t report injuries immediately. One study of more than 50,000 temporary total disability and permanent partial disability claims showed:

  • Injuries reported one to two weeks following the incident were 18% more expensive than those reported within a week of the incident.
  • Injuries reported three to four weeks after the incident were 30% more expensive than those reported within a week of the incident.
  • Injuries reported after four weeks of the incident were 45% more expensive than those reported within a week of the incident.

Showing supervisors and managers statistics such as these will help to ensure timely injury reporting, especially if Workers Compensation costs will be coming out of the departmental budget. Although the goal is prevention of workplace injury, once an employee has been injured, the objective should turn to a timely and safe return to work. This can best be achieved if both employer and employee share a desire to obtain the most effective care, which will help to expedite recovery and a safe return to the job.

Since each department is faced with the claim cost coming out of their own budget, managers and supervisors can take a more active role in assisting injured employees returning to work. For example, instead of the usual claim adjuster or attorney contacting the injured employee, the company concern can be conveyed through the department head(s).

One last element is fraudulent claims. Although deliberate fraudulent claims are a rarity, they do exist. These fraudulent claims will be much more difficult to file when Workers Compensation costs are analyzed departmentally.

Accidents are going to happen. There simply isn’t a way to prevent all accidents and eliminate all claims. But, it is realistic to reduce the frequency and severity of workplace injuries by making the department responsible directly, whether by penalty or by reward, for a safe work environment.