This Opinion piece appears in the Aug. 4 print edition of Transport Topics. Click here to subscribe today.
By Corey Lile
Founder and CEO
OccuSure Workers’ Compensation Specialists
It seems no good deed goes unpunished for the trucking industry. After climbing out of the bottom of the recession, demand for transporting goods is finally on the rise, and the industry is as steady as it has been in years. While this is encouraging, the rise in demand brings its own set of problems.
With trucking companies vying for qualified drivers to keep increased business moving — literally — companies are aggressively competing for willing workers, which means higher wages and more benefits. All the while, workers’ compensation is meddling in the fray, compounding the financial strain on the industry.
Workers’ comp is already a significant problem for trucking. The U.S. Bureau of Labor Statistics reports the industry has more on-the-job injuries and illnesses than the construction, mining and manufacturing industries. This fact alone makes workers’ comp premiums costly for carriers.
But as fleets grow, companies will have more employees who can get hurt on the job, raising the risk of having to pay even more money in already high workers’ compensation insurance premiums. Also, working conditions will intensify for drivers as they move more product. This will increase the risk for on-the-job injuries and, again, contribute to a rise in premiums.
But for trucking companies, there is hope for controlling the cost of premiums. Though the insurance market remains strong, workers’ compensation can actually contribute to cutting costs — if approached correctly. Where fuel and distribution fees are external and largely out of a carrier’s control, there is internal power to leverage with workers’ comp. By viewing the issue with long-term claims reduction in mind, companies have the power to lower their own premiums — no matter the current state of the insurance market.
But the road to a robust strategy is not as obvious as enforcing stricter safety education and procedures. This is an important step in lowering the number of claims, but injuries on the job are inevitable. For trucking companies, savings will occur in two ways: choosing the right insurance provider and getting injured employees back to work.
If a provider is not regularly communicating throughout the claims process, understand that there is also likely an efficiency issue that drives up claim duration and costs. By working with providers that use a managerial approach to claims adjustment, there is always one claims manager ensuring injured employees are receiving the treatment needed and are moving the claim to a close. These managers prioritize accuracy, expediency and communication among all parties.
Multidimensional communication not only ensures that trucking companies are aware of a claimant’s status, it gives injured employees a single point of contact throughout the claims adjustment process. Having someone familiar with all components of a case allows questions to be answered quickly and knowledgeably, alleviating destructive frustration and reducing the potential of a costly lawsuit.
Additionally, claim managers can proactively help companies in their hiring process to determine who might be a potential workers’ compensation problem. They also can provide guidance on whether termination should take place to again reduce the threat of litigation.
Focusing efforts to get employees back to work also is essential, as lost-time claims account for 94% of workers’ compensation costs. All it takes is writing at least three formal job descriptions of tasks that can be accomplished with a variety of injuries. Thus, an employee with a back injury could return to work after potentially just one week if he or she is able to contribute to the company by any means, such as auditing U.S. Department of Transportation or safety files, performing tire-tread checks or even working with a nonprofit if he or she doesn’t live close to the company’s headquarters.
When trucking companies develop and commit to a return-to-work program, employees aren’t sitting at home accruing a paycheck while their productivity is lost. Additionally, their impairment rating is less likely to be inflated, as there is existing proof that your employee is an able contributor to the company.
Whether premiums are higher or lower on the front end, over the course of just one or two years, the cost of claims will begin to decline significantly, leading to an overall declining trend in premiums for a long-term forecast.
Take, for example, a trucking company based in Tennessee. By partnering with an insurance provider focused on claim management and proactively getting injured workers back to work, the company reduced its workers’ compensation losses by 86%. The following year, the losses decreased by 88%, significantly reducing the insurer’s out-of-pocket claim expenses and lowering the employer’s premium. For an account worth $1 million, that equates to about $300,000 in savings each year.
As the burden rises for trucking companies and the potential for injury heightens, workers’ compensation will continue to be an area that contributes to making or breaking trucking companies. Luckily, significant savings can be found at a time when they are needed the most.
OccuSure, based in Brentwood, Tennessee, specializes in lowering workers’ compensation claims, particularly in the trucking industry.