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Archive for March 2011

Workers Compensation – claims trends –

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Our thanks to the Insurance Information Institute for much of this information.

A National Council on Compensation Insurance study on the cost of claims filed by workers who are obese had findings similar to those to a 2007 Duke University study. From the Duke study:

* Workers who were morbidly obese filed 45 percent more claims and their medical costs were more than five times higher than those of nonobese workers.

* Workers who were overweight filed 9 percent more claims. Their costs were 1.5 times as high as people with “normal weights”. (I’m in trouble.)

Workplace injuries and death were down in 2009 vs 2008.  The drops are significant enough that many experts attribute them to economic change rather than entirely to safety improvement.

For much more detail, follow this link to the III.   Insurance Information Institute

Workers Compensation Classification 2

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Getting classification right can be a dance. If your company does something uncommon or unique, you can wind up slammed into an expensive classification that may not be right.

Classifications have descriptions. States set basic rates and adopt descriptions, most commonly using data and wording from the National Council on Compensation Insurance (NCCI).

But how do you classify, for example, a glass recycler, if a state only offers reasonably relevant codes for recyclers, glass bottle dealers, and garbage haulers? The difference between those codes is significant. In that example, suppose the recycler has drivers who go to business sites, pick up waste light bulbs, and return to the recycling plant. Are they drivers or garbage collectors? They had better not be loading or unloading the truck, just taking the pallets or they will be in the higher classification.

More on this to come.

Workers Compensation Insurance Classification

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For any size company, it is important to get your Workers Compensation classifications right.

The determinants of Workers Compensation Insurance premium are payroll times rate based on classification times premium modification. It’s important to get all three right. We’ll focus on classification now.

Classifications are set from a list of hundreds of occupations. The list is basically national, with some state variation. The rate for each classification is set state by state. You can’t modify the rate for the classification; you can get the classification right for each kind of work your company does.
There are small common mistakes that can cost almost any company, in addition to the occasional whopper of a mistake.

If you are large enough to have a couple of layers of management, you can keep manager payroll out of high cost classifications.  But if the insurance carrier sees any evidence that the manager ever touches a tool on a job site or spends any time working in a hands on capacity, the carrier is going to dump all that payroll into the highest classification it can.

Call us if you have questions: 1-800-548-2329.  Or go to our Workers Compensation page.