Another good question I was recently asked by an employer!
Yes! Well…it kind of depends on some individual factors. If you can answer yes to any of these items then a claim review may be helpful and ultimately lead to a reduction of workers comp premium cost for your company.
- Are you on a loss sensitive rating plan? If you’re using some form of retrospective rating plan as a funding mechanism for your workers compensation coverage then certainly a claim review is not only a good idea but something that you should be doing on a regular basis. Claims play such an important part in the premium rating for any loss sensitive plan and have a direct impact on the bottom line premium. Discovery of improper claim handling by your insurance carrier may only occur through an independent claim review.
- Is your company experience rated? If your company has an experience modification factor greater than 1.0 then you should have a claim review conducted. Any debit mod, that’s anything over 1.0, means that you are paying a higher premium and is directly related to claims your company has incurred. Even if your company has a mod factor less than 1.0 a claims review may uncover mistakes on the claims you’ve had in the past. A claim review may discover and lead to corrections of errors in your experience modification factor thus reducing your overall cost of workers compensation insurance.
- Do you have a safe work place problem? A claim review, conducted by an independent consulting firm, may uncover latent safety problems found within your work processes or work place. Problems that may lead to safety violations and possibly fines by authorities.
- Have you experienced fraudulent workers compensation claims? A claim review may indicate gaps in your incident management processes. It may help you catagorize and identify red flags within your business that may lead to better zero tolerance fraud policies for your company.
As you can see, a claim review can certainly be helpful for any employer but is particularly important for those employers whose premiums are tied or are directly impacted by the claims they incur. So be vigilant when it comes to workers compensation claims, have a claim review conducted!
Hope this helps you out! Thanks!