10 Tips for Hassle-Free Workers’ Compensation Insurance in the Post-COVID Economy

Small businesses across the Southeast are seeing a marked uptick in activity as we head into the summer months. As the pace of business hastens, now is the time for owners and administrators to re-familiarize themselves with the ins and outs of Workers’ Compensation Insurance (WCI).

Oakbridge’s Stephanie Cox, AAI, Senior Vice President and Commercial Property and Casualty Practice Leader, recently outlined 10 key strategies for making the Workers’ Comp process run smoothly for everyone:

1. Subcontractors technically fall under your policy if they don’t carry WCI. Be sure to inquire when you hire individuals to do work on your premises or to work for others on your behalf.
2. Review the Panel of Physicians and make sure it’s posted in a conspicuous area. Make sure injured workers are directed to the panel to select an approved physician. The POP is state law in Georgia and many other states. Make sure yours is posted accordingly!
3. Monitor your company’s Experience Mod Rate. The “e-mod” is basically an employer’s safety score and it’s calculated by analyzing your claims history over the past 3 policy terms. You’ll want to keep your rating below the 1.0 average benchmark to reduce your policy costs. Monitoring the e-mod also keeps safety top of mind.
4. Set a reasonable deductible. Choose a maximum that you can afford should an accident occur and remember claims below the deductible don’t count towards your e-mod score.
5. Become a certified drug-free workplace. By doing so, you can realize a 7.5% savings on your WCI premium. Check your state Workers’ Comp regulations for details.
6. Remember that policy limits differ in Sections A & B. Section A is the portion of your policy that covers traditional WCI claims (injuries, wages, etc.). Section B deals with Employer’s Liability in cases of gross negligence and these claims are extremely rare.
7. Be aware of the Workers’ Comp audit process. Your WCI policy is audited every year to compare actual payroll to estimated payroll. Be sure to adjust your payroll amounts annually to avoid a large additional premium.
8. Report claims immediately. Reporting a claim quickly serves two main purposes. First, it signals to the employee that you take their injury seriously and are working in their best interest. Second, the longer the employer waits the more the final cost will be. Studies show that after one week, claim costs rise an average of 28%; after a month, 51%.
9. Create a culture of safety in the workplace. Consider a pre-employment physical for those employees who do manual labor to ensure they’re a fit for their assigned task. Screen new employees for recent accidents or pre-existing conditions to help avoid future injuries. Conduct routine safety training for all employees, including management. In today’s tight labor market, a reputation for safety can help recruit and retain good employees.
10. Remember, WCI is governed by individual states so check your state’s website for details. Other resources include the National Council on Compensation Insurance and the International Risk Management Institute.

Workers’ Compensation Insurance laws vary from state to state. If you do business in more than one state or need advice on how to best structure your policy, Cox recommends discussing your policy needs with your insurance agent.