Workers' comp coverage: key questions to ask for 2011
By Ike Devji
PRO ASSET PROTECTION
Guest blog by Joanne Foster
There are those who are quite pleased with their workers' compensation program and then there are those who look at it as a necessary evil of the cost of doing business which adversely affects the company’s bottom line. They may not understand the monthly invoices that never stop coming and are simply overwhelmed.
For those of you who are in the latter I category, I suggest a few questions to ask your broker or your insurance company directly when creating a proactive, cost effective and legally compliant program.
Please keep in mind that depending on the state that you conduct business in, there are certain statutes which preclude a claim from being closed completely and you gently remind yourself that a business decision was rendered to conduct business in those states.
Here are a few items to review should you believe that you may or may not be receiving the “best bang for your buck” when selecting a program, should you not have any large losses or in case you have been changing insurance companies every other year.
- Has your organization submitted accurate SIC codes, claim history reflecting the most current (mod factor), payroll records to your agent/broker/PEO to be submitted for a proposed price for your program?
- Is your industry a high risk industry?
- Has your organization been jumping from one carrier to another? If so, it is recommended that this practice cease. It is a red flag to the insurance industry when a company isn’t staying with an insurance company for three years.
- Will any officers C level management/owners be exempted from coverage?
- Do you conduct business and/or hire employees in other states?
- Does your organization meet the criteria for any discount programs based upon having a compliant drug free workplace, low mod factor, using the same insurance company for other insurance programs such as health, ADL, liability, hull etc. and/or is there any interest in participating having your insurance company conduct an onsite loss risk analyst?
- Are the proposed carriers/Third Party Administrators (TPA) familiar with actually insuring your industry?
- Are they an A+ book of business or a C book of business? I recommend obtaining referrals of actual clients of the potential insurance programs being presented to your organization. A and A+ books of business are more expensive, yet the customer service and standard business practices and compliance are consistent.
- Has your organization decided upon the deductible threshold amount, if any? It is recommended since the less paid out by the insurance company, the lower your premiums.
- Has your organization decided upon your special instructions/directives for the insurance company/TPA on the actual handling of your claims?
Joanne Foster is a Board Certified Workers Compensation professional who holds a Florida All Lines License. For the past 19 years she has been involved in creating implementing, adjusting, auditing and consulting nationwide Worker Compensation programs after having a career in Entertainment for over 15 years. Currently, she consults with organizations in creating and implementing cost effective proactive Worker Compensation Programs. She can be reached at firstname.lastname@example.org