Check Your Workers Compensation Loss History
Check Your Workers Compensation Loss History
Workers’ Compensation policy purchases and renewals will likely cost more beginning January 1, 2013 for any firm with a poor loss history. This is because at the beginning of the year, 38 states will change the way premiums are calculated.
The National Council on Compensation Insurance (NCCI) helps 38 states set their Workers’ Compensation rates. The rating organization is updating the “split point” used in its experience rating plan to more accurately reflect individual employer loss frequency and severity.
To learn if the state in which your business operates is an NCCI state, please contact us.
There is good news for firms who have worked hard to improve and maintain their loss profiles. They will be rewarded with a higher proportion of credits added to premium pricing. This will also be true for employers who have invested in loss control, safety, their people and a strong return-to-work program. In the long run, all firms will stand to gain from these changes because they will be motivated to improve their risk profiles and loss experience.
In the short run, though, employers with bad workers compensation loss experience in NCCI states will see a higher apportionment of debits added to their premium pricing. The biggest impact will be on employers experiencing high-frequency, low-severity workers’ compensation claims. The weighting system is heavily leveraged on frequency of loss vs. severity of loss because these types of injuries can be controlled by employers through their safety programs.
To anticipate these changes, firms should implement risk control and safety programs, along with post-loss practices such as return-to-work and modified-duty return-to-work programs.
Risk management professionals at KMRD Partners have the knowledge to help improve your firm’s risk profile and loss experience, whichever state your business operates in. KMRD reduces the overall cost of risk for clients by producing a greater value for each insurance dollar spent, while utilizing an enterprise risk management approach to engineer the optimal solution.
To learn more about our insurance and risk management solutions, contact us at contactus@kmrdpartners.com before one minute from normal strikes your organization. Please feel free to share this e-mail with anyone who may find it to be useful.
