Without question, the far more important date of the year is six months after your renewal date. If your broker doesn’t know this, or talk about the importance of the Unit Statistical report and the Valuation date, you have the wrong broker.

If you are not experience rated or experience modified now, or ever expect to be, this won’t really apply to you. In California, only those businesses which pay somewhere around $15,000 in annual Workers Compensation premiums are experience modified. And it takes three policy years to become modified.

The California Workers Compensation Insurance Rating Bureau has key information about the Unit Statistical report here: https://wcirbonline.org/wcirb/Employer_Guide/usr.html

If your Experience rating is over 1.00 then become unsettled now if you have never heard the phrase, “Valuation date”.

You know the feeling, or you’ve heard the idea that the California Workers Compensation system is out of control. It sort of is, and sort of isn’t. There are things you can do. The next post will explain the very first thing to do.

Hint; it’s easy. And you can start to get control.

Cheers,

Mike Vrchota

Her question is about Agents and Brokers offering Work Comp coverage.

I mentioned that the most common and well-known certification for Property and Casualty agents,

CPCU, requires only one overview class on Workers Compensation.  

So this brings up the question: from whom should you get your Work Comp coverage?

How will you know if the Broker/Agent is experienced in Work Comp?

Considering that many businesses devote more premium dollars to Work Comp coverage than any other coverage line, it becomes more important to consider how businesses obtain their coverage, and from whom.

In the same way that every business is different, every Broker is different.

And, even if a Broker has letters after his or her name, it doesn’t mean that he/she is a good match for your company.

So what do you look for?
Before I mention other things, it’s important to mention that all the knowledge in the world doesn’t help if the person you’re working with isn’t providing integrity and transparency.

Beyond those basic character standards, there is a certain base of knowledge your Agent/Broker should readily display. Without going into detail, I submit the following list as a basic checklist.

Because the California Workers Compensation system is so large and presents, (untold) complexity at every turn, my first suggestion is to work with someone specializing in Workers Compensation coverage. Someone who is even…wonkish about it.

Now whether you have a specialist or not, the broker should have extensive knowledge of how your experience modification is calculated. If you’re not currently modified, he/she should be able to forecast when you will be, and what your mod might be.

He or she should also provide detailed suggestions to get your mod lowered, if it’s been on the high side, (over 1.00). They should know exactly what a Unit statistical report is, when it’s filed, and by whom, (this is the key report your insurance company provides to the Workers Compensation Bureau).

The broker should know how important it is to make certain that you are classified properly, and that your estimated premium is equivalent to the current payroll and operations. If you’re a contractor they should regularly advise you to keep current with all your sub-contractors to make sure you’re receiving valid and complete certificates of insurance.

In addition, they should show a willingness to be your partner as it relates to your premium audit. Your premium audit, (and the resulting audit premium), can become an unwelcome surprise if your broker does not provide meaningful knowledge about how you can prepare for the audit.

Please consider this a short treatment of a substantial subject. To summarize, your agent/broker can be involved in regular steps to lower your premiums, (if they know what steps to take). If you don’t see them involved, then they either don’t know what to do, or they are comfortable just renewing your policy each year. Are you ok with that? Let me know your thoughts.

Cheers, your Work Comp wonk

(by your overworked claims adjuster).

The dollar amount your insurance company has reserved for your claim counts as a loss against your policy, and is reported to the Workers Compensation Insurance Rating Bureau, (WCIRB). It then appears on your Unit Statistical report. This will happen year after year until the claim is closed, but thankfully, it only counts against your experience modification for the first three years.

This is all fairly reasonable, and in fact, the insurance companies are required to treat your open claims as paid claims. However, at least two issues here have substantial impact on your Unit Stat report, which means they have direct effect on your premium.

The issues are:

 
1)      The dollar amount your Claims adjuster has reserved for the claim is larger than necessary, and
2)      The Claims adjuster has kept your claim open, even after your employee is back to work!!

The reasons these things happen:

 
1)      When claims initially happen, the claims adjuster has no idea how substantial the injuries to your employee are. So she sets a claims reserve on the high side, BUT NEVER BACKS IT DOWN!! Example: The employee’s cut, which gets ten stitches, is treated as a $50,000. claim. Does this make sense?

2)      In many cases, the adjuster doesn’t keep up with the employee, or with you, to know when the employee is back at work. And even worse, in some cases, the claims adjuster has every paperwork item he needs to close the claim, but the information just sits on his desk. Does that make sense?

As they say, “the squeaky wheel gets the grease”. Be the squeaky wheel. How, you say?

Well, either you have to do it, (yea – like you have time for that), or your Broker/Agent does it.

That’s right; this is regular maintenance for your program. And it pays off.
You can positively affect your experience-modification if you do this.

One of the best things I hear from an adjuster is when she says: “Oh, I can close this claim”.

And I say, great, could you do so, TODAY!! Thank you, my client will be delighted.