Opinion: Managing Your Workers' Compensation Program
i>Commercial Accounts Manager
nsurance Service of Asheville Inc.
Soaring premiums and reduced availability of coverage for workers’ compensation are having a significant impact on the trucking industry. Some insurance companies have withdrawn, leaving only a few providers. The remaining companies are adjusting rates to more adequately address the increasing number of claims and associated cost. In addition, they are more selective regarding the qualifications of an account. This trend appears to be one that will continue for at least 24 to 36 months.
Employers may improve their position in this difficult market by “getting back to the basics.” For some, it may be implementing new programs. For others, it is revisiting and strengthening existing programs and procedures.Regardless, the first step is to take immediate action. Review current procedures pertaining to new hires, drug testing, safety committees, remedial training and disciplinary action.
The best way to prevent a problem is not to hire the problem. Although the industry is faced with personnel shortages, it is critical that qualification standards be maintained in all areas. Employment records and background checks to the extent allowed by law are vital in reducing the potential of new-hire problems. Company physicals, in addition to DOT physicals for drivers, should be considered for all new employees. Don’t concentrate on the drivers alone. Office personnel can be the source of major claims relating to carpal tunnel syndrome. Review the ergonomic factors associated with all areas of the business.
Drug testing for all new-hires as well as random testing of all employees should be considered. Safety review committees should be fair but tough on accident investigations to determine the cause and prevention. Management must be willing to provide remedial training and take disciplinary action if necessary.
Although prevention is the most desirable means to avoid claims, companies must do a better job of managing a claim after it occurs. From the initial report to the final settlement, the employer should monitor the claim. Don’t assume the insurance company is taking care of everything. Trucking has its own unique exposures, especially pertaining to drivers. An injured driver could file a claim in one or more states depending on applicable laws. Making sure the injured party is contacted promptly and receiving appropriate attention might avoid attorney involvement that could lead to a prolonged and expensive claim. In North Carolina, an attorney can receive every fourth check paid to a claimant plus a percentage of any final settlement. Injured employees often seek legal assistance because they don’t perceive they are receiving the attention they deserve. Stay in touch with the employee and the claim representative. Establishing communication among all parties keeps you “in the loop.”
equest claim experience at least quarterly. These reports may alert you to a situation that needs attention, such as an aging claim with no recent activity, outstanding reserve on someone who has returned to work or other situations. Good claim management is a key element in managing your workers’ compensation expenses.
Managing your program also requires packaging your account to attract insurance companies. You have to “sell your account” to the companies.
Insurance companies are emphasizing the quality of submissions. How your account is presented could mean the difference between receiving a quotation or being declined. Attention to detail is paramount in providing a quality submission. Incomplete information, lack of detail or sketchy loss information most likely will land your account at the bottom of the pile or even in File 13. Provide the agent-broker with detailed company history, key personnel and experience, information about safety awards and corrective actions for recognized deficiencies. Significant claims should include an explanation. Don’t leave anything to the underwriter’s imagination. For example, include photos of your trucks and facilities.
Most importantly, get started early. In the current market, 120 days is not too early. Select your agent carefully. With fewer insurance companies to approach, you don’t need five agents marketing your account. Partner with someone experienced in transportation who is genuinely interested in finding solutions to your particular needs.
Finally, for the “long-haul”: Association and captive insurance programs are gaining popularity again. Some trucking associations have been successful in establishing and maintaining self-insured workers’ compensation funds. Several states now have favorable captive laws and are seeking captive business. Thorough investigation and evaluation of the program are needed, though they should not be overlooked as potential options. They may provide a more stable environment in cost and coverage, depending on your particular needs.
There is no quick fix to the workers’ compensation market. No one knows what future direction it may take. Successful management of exposures will benefit the buyer in the current market and provide more options for long-term solutions, thus contributing to the success of your business.
Insurance Service of Asheville Inc. provides commercial insurance services to clients in western North Carolina. The author holds a Class A CDL and recently spent six months as an over-the-road driver to learn more about the trucking business.
This story appeared in the June 17 print edition of Transport Topics. Subscribe today.
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