Did your workers compensation rates increase at your 2013 renewal

You just received your 2013 workers compensation renewal, the premium increased and your experience modification (E Mod) did as well.   Do you know why, specifically?  Are you satisfied with your brokers answers?    Do you have a plan to reverse  this trend?  If you don’t know exactly why and you don’t have a plan to reverse this trend, then expect to pay a lot more for your workers compensation in the years to come.

Many companies with  higher than expected injury rates experienced a substantial increase in their workers compensation premiums at their January 1, 2013 renewal.  As projected, the new split point changes to the E Mod formula increased your E Mod and consequently your premium.  Whether you realize it or not, your  E Mod in excess of 1.0 caused insurance companies to view you differently and gave them the green light to raise your premiums on top of the increased E Mod.  When Insurance companies price your policies, they place you in rate tiers based on your E Mod and when your E Mod goes up, guess what, so do your rates.

If you didn’t go into 2013 with a plan to reverse this trend, you need to act now to avoid a fall off your own “fiscal workers compensation cost cliff”.  Here is what we recommend:

• Your safety and risk management departments need to immediately become a more of a critical component to your business model.  If you don’t have a plan in place, hire an experienced occupational health & safety professional to help you implement a plan quickly
• If your company has an E-Mod of 1.2 or higher, you need to take drastic steps to reduce your injury rate now.   Again, an experienced professional knows how to help and has a specific plan to address this issue
• The reserves on all of your Workers Comp claims will now be more important than ever.  If you do not have online access, it may be good to check with your carrier to see if online access is available.  Without the ability to accesses your WC claims and get real time data you will be unable to make sound business decisions to affect the outcomes of these injuries.  Do not wait around to your next renewal, like you have in the past to feel the impact
• Alternative insurance  arrangements such as large deductibles, self insurance, loss groups, risk retention groups, and captives may now be more attractive and cost effective.  Caution, if you don’t have plan in place to control injuries and the costs associated with these injuries, alternative (loss sensitive) arrangements are not a viable option
• If your company is in the Assigned Risk Pool because you cannot find coverage in the voluntary marketplace, you need to immediately institute or increase the efforts of your safety program.  Failure to do so, will increase your premiums to the point where you may have to close your doors