When Insurance Companies Conduct Workers Compensation Inspections –

Have you had an insurance company conduct a site inspection at your workplace? How about after the inspection, did you receive a post site inspection letter of recommendations? When an employer buys a workers compensation insurance policy they’ve just partnered up the insurance company providing coverage under that policy. Let’s talk about workers compensation inspections and how they fit into the overall picture.

Site inspections are the eyes and ears of an insurance company. Nothing new about that! For the most part a policyholder is only represented to an insurance company underwriter as the information provided on an application for coverage. Granted, applications have improved and the information gathering process has been enhanced by the advancements of communication in today’s society.  But nothing quite compares with the information gained through a physical inspection of an employers plant or work site.

Why are site inspections conducted?

  • Accurate Understanding of Business Operations – If you are a frequent reader of this blog or a visitor to our website, WorkCompConsultant.com, then you know by now that a great deal of workers compensation mistakes come from some form of poor communication or understanding. Site inspections allow an insurance company to get their eyes and ears on what really goes on at a policyholders place of business. 
  • More Accurate Classification – Workers compensation codes are at best confusing! Eyes on the actual work processes found at an employers place of business should provide additional information which may lead to more accurate classifications.
  • More Accurate Premium – A better understanding of the work processes present at a work site should lead to m0re accurate premium for both employer and insurance company.
  • Time Limitations on Policy Changes – For most employers, insurance companies have only a certain amount of time from policy inception to make changes in the classification codes found on the policy. Especially if the change increases the employers premium. Simply put, they want to make sure the codes being used are accurate at the beginning so they can get the correct premium for the exposure. Most construction industry employers have different rules that apply to making code changes, but that something for another blog.
  • Acceptability for Coverage – Not all insurance companies will provide workers compensation on all types of business operations! Each company will have it’s “appitite guide for coverage.” Site inspections allow the company to make sure the business operations being conducted by the employer are acceptable within their company rules.
  • Safety Recommendations – It’s in the best interest of the insurance company to insure employers who operate safe work places.  After all, under a guaranteed plan it’s the insurance companies money being used to pay claims. They look for the proper safe guarding of machinery and use of personal safety equipment like safety glasses, gloves, steel toe shoes, safety harnesses and hearing protection along with other items.

Insurance companies and site inspections go hand in hand! Good for the employer? Yes. Good for the insurance company? Yes.

Hope this helps you out! Thanks for visiting!

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