There are numerous ways to control the costs related to workers’ compensation. This article focuses on the actual premium paid instead of the other components associated with workers’ compensation costs such as labor used to investigate, report, and follow up on workers’ compensation claims, lost productivity directly related to an accident, temporary labor to replace an injured employee, and other administrative, claims and loss control related expenses.

The workers’ compensation premium alone can be a significant cost to any business but by taking the appropriate administrative steps you can ensure that you are not overpaying for your insurance. Trust me, your insurance company is not going to help you save money, and neither will your agent as he earns more commission when you pay more in premium. Below are 10 questions to ask when reviewing your workers’ compensation policy and risk management program:

1. Did I reduce reported payroll to account for the extra compensation related to overtime pay?
2. Did I cap or exclude executive payroll from the reported payroll?  
3. Are my employees properly classified and can some be classified at a much lower rated class code, such as clerical or sales?
4. Does my policy have a credit applied which can reduce premium by 5% to 30% or more?
5. Does my insurer have competitive rates filed with the State for the governing class codes of my business?
6. Is my company experience modification factor correct and applied?
7. Did I make sure that losses used to calculate the experience modification factor are correct and do not include excessive reserves?
8. Am I properly reviewing and controlling my claims to ensure insurers are not paying excessive claims and passing those costs on to me?
9. Is safety a priority at my company as frequency of claims drives premiums?
10. Can I retain or transfer risk to lower my premiums and ultimately save money?

Risk Manager’s Takeaway:

Taking the time to answer some basic questions can help you focus your efforts to reduce risk and develop a sound risk management plan. This can save you substantial money over the long run. Call the experts at Star Risk Consultants and we will be happy to review your program with you to create a plan that will save you money.

An effective fleet program can save your company money, protect your company assets, and prevent employee injuries and even death.  Sometimes an accident can occur when it is no fault of a driver while at other times the driver involved in an accident had no right being behind the wheel. Your drivers can pose a significant risk to your organization and you have an obligation to ensure they are safe and do not pose a threat to other drivers on the road or the property of others. Below are several things to consider when creating a fleet loss control program:

1. DOT Compliance: First comply with federal law and make sure your employees maintain Commercial Drivers Licenses (CDL) issued through your State if required by your operations and vehicles being used. Contact your State DMV for additional information.
2. Inspection of Vehicles: If your company owns vehicles you must ensure that they are safe and regularly inspected. You should have a pre-trip inspection checklist completed by drivers to identify any issues or damage to the vehicle to be used.
3. Maintenance of Vehicles: Your vehicles must be maintained on a regular basis to ensure they are safe to operate. Regular maintenance should include oil and fluid checks/changes, tire rotations and replacements, alignment of tires, checking brake pads and rotors, replacing filters, and wiper changes to name a few. As additional miles are driven, major components of the vehicle must be inspected including the engine, transmission, belts, etc. Numerous apps, GPS and telematics, are available to track mileage and to remind management when vehicles are due for servicing.
4. Driver Selection: Motor Vehicle Reports (MVR) should be checked for every employee upon hire and at least annually thereafter. The reports should be inspected for major violations including driving while intoxicated or careless driving, accidents, moving violations including speeding or failure to use turn signals, and non-moving violations. Criteria should be established and uniformly applied to all drivers, outlining what is an acceptable MVR and what is not. Unsafe drivers SHOULD NOT be permitted to drive on any company business.
5. Personal Vehicles: A Personal Vehicle Use for Company Business policy should be enforced. If an employee is to drive their personal vehicle on company business, that person must be a safe driver as supported by regularly inspected MVR’s and must maintain insurance on the vehicle from an acceptable carrier with limits as specified by the policy.
6. General Safety: Safe practices including seat belt use, no eating or drinking, no cell phone use, limiting distractions while driving, no driving while intoxicated or on any medications, obeying all traffic laws, no picking up hitch-hikers or driving other non-employees, and similar best practices should be specified.
7. Accident Reporting/Investigation: An employee accident reporting, manager and company review and investigation process should be specified in the program. An Accident Review Board should be put in place to evaluate any and all incidents involving a vehicle.
8. Training: Driver training is critical and in-person and on-line training should be provided on a regular basis. Training and employee sign off on the fleet policies should take place.
9. Insurance: Proper insurance must be maintained with coverage endorsements added to properly address the risk of the business. An insurance professional should review your fleet program and place the correct policies to protect your business.

Risk Manager’s Takeaway:

Star Risk Consultants will audit your current fleet program and your operations. A Certified Safety Professional will provide expert advice on how to improve your program and make it world class. A comprehensive fleet program can reduce your company risk, protect employees and ultimately save you insurance premium dollars and the enormous costs associated with accidents.

Creating written job descriptions is often considered an inconvenient chore.  Arguments follow that writing a descriptive outline of an employee’s normal job tasks is not worth the effort.   A good risk manager knows, however, that written job descriptions can help an organization in several critical areas:

• Job descriptions are essential for reducing workers’ compensation costs and returning employees back to modified or full duty work in a timely manner after a workplace injury.  Before a treating physician agrees to release an employee back to work, most will require a description of the job and the physical demands necessary for performing the job tasks.  Supplying the physician with job descriptions for modified and full duty positions at the start of treatment will help bring injured employees back to work in a timely fashion. 
• Employers covered by the Americans with Disabilities Act (ADA) or similar state laws should prepare written job descriptions in advance of an issue.   This will provide an initial starting point for reviewing obligations and liabilities the employer may be subject to under the corresponding act. The ADA makes it critical for employers to maintain accurate job descriptions that include the essential functions of the job. Reasonable accommodations can be determined only when reviewing against accurate job descriptions.
• Proper employee classification depends largely upon accurate job descriptions.  Proper documentation can prevent Fair Labor Standards Act (FLSA) claims and other issues.
• A written job description can be a useful tool in a job interview. The job applicants can be asked if they can perform the essential functions of the job by reviewing the position’s job description. This will help support hiring decisions and also provide defenses for ADA, discrimination or other claims that may arise.
• Written job descriptions can be used in performance evaluations, disciplinary actions and terminations.  This will again provide a defense against employment related litigation including retaliation claims.
• Written job descriptions can assist your organization in reviewing Equal Pay Act requirements.

Risk Manager’s Takeaway:

Make the effort to create accurate written job descriptions and they will likely save you time and money over the long haul.