The insurance market place is cyclical. Over the past nine years, carriers have continued to cut premium pricing in order to remain competitive and sustain market share. Unfortunately, a less than stellar California workers compensation system and an increase in medical costs are beginning to force insurance markets to raise their rates. Workers compensation insurance is already one of the most expensive lines of coverage for many companies, and is only going to get worse. Consequently, it is more important than ever to focus on controlling claims management for past, current, and future work related injuries. There is a monumental difference between short and long-term costs. A short-term cost may be saving money initially at the renewal by choosing to partner with the most economical workers compensation insurance company. In making these decisions it is critical that your insurance representative outlines the services that are provided by each insurance carrier and how they handle claim issues. It is not uncommon for low cost insurance markets to outsource their claims management to a third party administrator. Communication can prove to be difficult with these avenues, which will inevitably cost you more money over the long-term by negatively impacting your experience modification. In California the experience modification formula is updated almost annually. It is important to realize that a unit statistical filing occurs six months after your renewal. This is when the Workers Compensation Insurance Rating Bureau will take a three year snap-shot of your claims history prior to calculating your new experience modification. We are all aware that a high experience modification can equate to dollars lost on premium increases, but extensive focus must be placed on any claims during the time prior to the filing. Any small partial disability claims should be closed if possible and claim medical/disability reserves should be mitigated. Lastly, it is important that both the insurance brokerage and workers compensation insurance company that you utilize provide extensive services. They should offer proactive tools to reduce the exposure of work related injures through loss control and documented safety meetings. In house claim consultants and case nurses should be accessible to service past and existing injuries. Exit interviews and letters for terminated employees should be revised and re-altered to minimize post-termination claims. Proper notification posters that highlight your applicable medical provider network and labor law practices should be posted on all jobsites. You are paying an insurance broker for more than just delivering a product, therefore it is pivotal that focus is placed on your business 365 days out of the year. Just remember, short-term savings are not always in the best interest of your business and a multitude of factors should go into your workers compensation insurance buying decisions.

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