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

A lonely Nevada road

Sure, the ads can be humorous in their own way, but the issue is serious for business owners who want to stay in business, be profitable, and continue to employ folks in their local community, (which is the desire of most employers).

One step owners can do is take action and consult with an Insurance Broker to dig into their Work Comp plan to look for mistakes or overcharges. In some cases, significant funds have been recovered and positive changes have been made by qualified Brokers.

Recovering funds from previous errors, and making sure your Experience Modification and class codes are exactly where and what they should be may give some business owners the glimmer of light to see their way through challenging times, (like now). The methods and results being referenced can be seen at the Institute of Work Comp professionals, (IWCP), website: www.workcompprofessionals.com

Client Care Insurance is a Certified Work Comp Advisor agency helping California Employers, Human resource managers, (and those who help them), to quit losing money and develop powerful employee relationships for bottom-line improvement. Find a broker with a plan to put money back in your pocket.

Don’t move, improve.

Cheers, your Work Comp Wonk.

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

The Ventura County Star, in this Workers Compensation article is mentioning that the local District Attorney is sending investigators out to businesses. The DA’s staff simply shows up at any business and asks to see written proof of their Workers Compensation coverage.

If you have coverage, but don’t have immediate proof of it, they give you ten days to get the proof.

If the business lacks coverage, the owners face fines starting at $10,000. They also face Criminal Misdemeanor charges. This is detailed in Labor code section 3700.5

The article doesn’t mention that in addition to the fines, the business would likely be shut down until they can provide proof to the appropriate agencies and authorities that they have indeed obtained coverage.

How much lost business could that mean? How many days with doors closed?

Businesses should obviously have coverage to comply with known laws. And District Attorneys in various jurisdictions are beginning to enforce the laws that have been on their books for many years.

They’ve also been hearing from businesses which are covered, about the competitive disadvantage they face as they compete against un-insured businesses.

Some industries habitually claim that their staffpersons are all independent contractors, such as: Real Estate and Lending salespersons. Enough on that for now, just make certain that you have coverage, have proof of it, or that you get it, ASAP. It would be a good idea to do so before the premiums go up on January 1, 2009.

Cheers to the insured, Jeers to the uninsured.

This post is another call to those employers who haven’t yet obtained coverage.

As seen here in an article from the Californian, a Salinas based newspaper; the service station employer/owner was placed on probation for three years and is required to pay a $10,000 fine for not carrying coverage.

The article doesn’t mention this, but it’s likely that she was shut down until such time that she could prove that she obtained coverage. How many days could that have taken? Whatever it was, that’s a lot of revenue for a gas station to go without. Note also that she pleads guilty. She had no choice.

If you’re an employer without coverage, contact your local broker, (or myself), and get covered now.
Don’t take the chance that the Department of Industrial relations won’t find you.

Cheers, your work comp wonk.

Uninsured employers need work comp coverage

I doubt whether many readers of this blog are in the position of being an uninsured employer without Workers Compensation coverage. If you are, an article out of San Luis Obispo highlights the perils of being on either side of this problem. The writer, Colin Rigley, describes how the injured employee slipped and incurred injuries, only to find out that the employer had not obtained coverage after buying the business.

The employer has filed for bankruptcy, and is facing a civil lawsuit from the injured employee. He is also likely to have the Department of Industrial relations chasing him to recoup the payments the Uninsured Employers Benefits Trust Fund made to the employee for her treatments.

Employers, the message is clear; Don’t operate this way.
If you do, the risks to you and the injured person can be more than you can imagine.

Cheers, to those who operate properly

If you are a company owner, CEO, HR manager, or anyone else involved in renewing your company’s work comp coverage plan, consider this blog one of your resources as you endeavor to do the best you can for your company.

Sometimes, it’s not easy trying to get an appropriate level of service in the work comp coverage arena. To help answer questions, and put you – the buyer or manager of Work comp – in the driver’s seat, this blog exists.

It was created by me, Mike Vrchota, a California insurance agent/broker, and my philosophy is obsessively client-centered. As you consider renewing your work comp plan, if you sense that your current broker or insurance carrier are not putting your interests first, then arm yourself with knowledge about the work comp environment. Resources are available to help you.

I’ll be posting regularly on topics such as:

Class codes – are yours correct?
Multi-State coverage – separate policies, or all together?
Experience Modification – What is it? Can I improve mine?
Can I get away from the State Fund?
How? Why? When? What? (are you kidding!!)

This is the tip of the iceberg.
We have much to discuss as we talk about improving your bottom-line.
And improve we must, because forces of change are gathering.

Comments, rants, questions, and concerns are all highly encouraged. Give me your stories, share victories and inform others about your companies’ experience related to starting or renewing Workers compensation coverage.

Cheers, your work comp wonk.