Business owners waste millions of dollars in workers compensation premiums each year. But the solution is simple and inexpensive. Numbers don’t lie, and an effective Return to Work (RTW) program is a proven means to significantly reduce work comp costs. Let me share a few tips I’ve learned while helping my clients implement an RTW program.
Magic Number Seven
The magic number seven carries particular significance with regards to workers compensation claims. NCCI is the organization that governs workers compensation in most states. They apply a 70% discount incentive if an injured worker returns to work within 7 days and provided light duty. I routinely model claims scenarios for clients and they show an employee returning to work within 7 days greatly reduces a claims impact on experience modification, significantly reducing future workers compensation premiums.
Think Outside the Box
I often hear business owners voice concerns about light duty not being a viable option due to the nature of a particular occupation. I continually challenge my clients to think outside the box. Together, we create RTW programs that work. Remember, just getting an employee back to work in any capacity reduces a claim’s impact on future costs by 70%. Don’t focus on the inside of the box – what the particular job description entails. Go beyond. Consider opportunities for business growth such as telemarketing, canvasing, administrative assistance, or other ways to put the injured employee to work to help with your business. Light duty return to work can even include services to your community or nonprofit organizations of your choice.
Open the attached PDF and you will see claims examples of a client who did not commit to a Return To Work program prior to working with our agency. Two claims are highlighted. The top one ($12,577) illustrates where the employee returned to work within seven days whereas the bottom one ($15,880) the employee did not. The effect of each claim on insurance premiums over three years are shown to the right. There is no mistake – the bottom one cost the business $24,080 more in premium even though the actual costs of the claims were relatively similar. In addition to the extra premium, work comp insurance underwriters will likely remove previously granted discounts due to predictive modeling, acknowledging the lack of an effective RTW program, further increasing premiums. The result will be a spiraling increase to one of the business’ largest expenses.
Talk to your Bankers insurance agent about outside-the-box RTW options. Create an implementation plan. Finally, execute. Only then will you be on the path to saving significant premium dollars and becoming a preferred risk over which workers comp carriers will fight.
Bankers Insurance utilizes risk management strategies such as RTW, predictive modeling and analytics, and many others to obtain significant premium savings while improving our client’s existing risk management practices. For more information on our business insurance products and services, visit commercial insurance.
Get on the path to becoming a preferred risk today.
Written by Mike Barnum, Sales Executive, Bankers Insurance. Contact him at firstname.lastname@example.org or (757) 589-9493.