The Rising Cost of Insurance and How to Cope

There is no denying that insurance costs across the board are beginning to rise.  For the past five years insurance costs kept on diving and diving, dipping lower and lower than I have ever seen before in the marketplace.  Insurance carriers were writing risks at alarmingly low rates that I knew would not be able to be sustained.  One of my previous bosses used to call those carriers "the flavor of the month".  And boy was he right.



Now fast forward to this year.  Carriers are beginning to tighten up their reigns and become more
strict on what they will accept and what they will decline.  Minimum premiums are beginning to rise again and you most likely are seeing more carrier declination's from your broker than quotes.  Some carriers that flourished during these tough times are at "capacity" and not writing any new business.  Ahhhh, the flavor of the month.   In turn, some of my clients are having to now scramble, move carriers yet again and take a substantial premium increase due to choosing those insurance carriers.

A few things to note during these times.

1. It pays to stick with an insurance company that is established and not premature to the marketplace.  Your premiums may be a bit higher than the "flavor of the month" insurance carrier.  But if you can afford the few extra dollars, stick with the more secure, proven carrier.  You will save money in the long run.
   
   
2. Check up on your insurance carrier.  Go to AMBest and look at your insurance carrier's rating, if it is not on your quote that the insurance broker provided.  Typically, anything under A- VII you should avoid as their financial situation may be a little shaky.
   
   
3. Don't be afraid to ask your broker to market your insurance renewal out.  This is their job!  Specifically request a marketing summary of insurance carriers and their responses upon renewal.  This not only helps avoid assumptions that your broker didn't do his or her job, but it also keeps you in tune with what the insurance marketplace is doing.  Are insurance carriers quoting high premiums or are they even quoting at all?  Or are there only a few carriers that will entertain your type of business?  Market, market, market your insurance renewal.  Knowledge is power.
   
   
4. In 2013 and 2014 I would suggest paying close attention to your workers compensation and professional liability lines of insurance.  These are the two lines of insurance that I have seen get hit the hardest in the past year.  Workers compensation rates are rising rapidly and professional liability premiums and deductibles are fluctuating swiftly from carrier to carrier.

The good news is that the even though the flavor of the month's are beginning to be plucked from the pack, the insurance carriers that are remaining will continue to be reliable and successful which should be of comfort to you and your company.  Knowing that your insurance carrier will be there through tough claim situations is what you really want and need.  

If times are hard and you can't afford to stick with Mr. Reliable Insurance Carrier and are forced to go with the Flavor of the Month Insurance Carrier...it's OK.  But just try and get back to that reliable carrier as soon as you're able to.  Your pocketbook will thank you!

Do I Really Have to Report Every Workers Compensation Claim?!?!

This past week I did a presentation on what a reportable claim is and how first aid differs from a reportable claim.  After the presentation I quickly realized that many people in the room, let alone my current clients, probably had no idea they had an option when it comes to reporting workplace injuries.  So in the next few minutes, I'll attempt to explain what a first aid vs. reportable claim summary situation actually is.


First off, Cal/OSHA defines "first aid" as any one-time treatment, and any follow-up visit for the purpose of observation of minor scratches, cuts, burns, splinters, or other minor industrial injuries, which do not ordinarily require medical care.  This one-time treatment, and follow-up visit for the purpose of observation, is considered first aid even though provided by a physician or registered professional personnel.  For those of you who do not know who or what Cal/OSHA is, they are responsible for enforcing California laws and regulations pertaining to workplace safety and health.  They provide free assistance to employers and workers about workplace safety and health issues.  Cal/OSHA is also the organization that enforces rules and regulations, can impose inspections and/or fines to employers based on worker complaints and high hazard industries.

What's the difference between recordable incidents and first aid?  I've listed some examples below.

RECORDABLE INCIDENTS:

• Occupational fatalities
• Occupational illnesses
• Lost work day injuries - injury caused absence from work and/or restricted activity beyond the day of injury
• Loss of consciousness
• Positive X-ray diagnosis (fractures or broken bones)
  

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NON-RECORDABLE INCIDENTS "FIRST AID":

• Treatment of first degree burn
• Application of antiseptics during the first visit to medical personnel
• Removal of foreign bodies not embedded in the eye by irrigation
• Use of non-prescription medications
• Application of hot and cold compresses during the first visit to medical personnel
• Negative X-rays diagnosis (no fractures or broken bones)

First aid is a one time treatment and subsequent observation of minor injuries and need not be recorded if the work related injury does not involve loss of consciousness, restriction of work or motion, or transfer to another job.  

Let's cut to the point.  Why does it matter?!  Well a reportable incident means that a claim will show up on your insurance loss runs or claims summary for the year.  If you report a claim to your workers compensation carrier, it will show up on your annual report.  An incident that only requires first aid does NOT have to be reported to your insurance company as a claim.  Not only can your experience modification rating be positively effected by this, but the bottom line is that it effects your pocket book in a positive way, as well.  Less frequency of claims shows a workers compensation carrier that you are a safe, responsible employer and in turn more premium credits are given to those safe, responsible employers.

If your questioning whether or not a claim is reportable, feel free to give a us a call before making that call.  We're always here to help!