Workers Compensation Insurance: Three Secrets You Must KnowRandy Russell CPA
March 6, 2009 — 2,118 views
For any organization, costs related to employment are without a doubt the largest and most expensive budget item. Often times the drain on your budget is from workers' compensation insurance premiums.
Understanding more about these three secrets of workers' comp insurance will undoubtedly help to reduce your costs, and allow your profits grow.
1. Employee injuries are not paid by insurance companies
Have you noticed that most of the time you end up paying more money to the insurance company each time they send a check to your employee for disability. You must also realize that each claim ends up costing you money out of your own pocket. Except for the fact that you pay premiums, your company also has to pay for each claim in the form of:
- "Experience Modification"
- Lost productivity
- Low employee morale having to compensate
Understand that workers' compensation insurance does not provide compensation for injured employees, you do.
2. Bad service from the Insurance Company Claims Department
Now that you understand one of the dirty little secrets, it is time for you to know how important it is to have effective management of your claims. Claims adjusters are often overwhelmed with having to deal with large volumes of cases. Often times, the injured worker will not receive the necessary attention. Be proactive in notifying the insurance company, otherwise the case may fall through the cracks and end up costing you more money in the long run. Have a process in place to ensure that the costs are limited and that the injured employee gets the needed treatment and is quickly returned to work.
3. Workers' Comp Audits
Since the actual cost of insurance is calculated after the policy has expired, it is extremely important that the audit is done correctly. Right from the start you are at a disadvantage. While the insurance company auditor knows the rules, they are usually clueless on your type of business. Make sure that you have an expert on your side to watch out for the mistakes that will likely be made in the insurance company's favor.
Understanding these three secrets can make a significant difference in how much you pay in workers compensation premiums.
About the Author
I highly recommend that you have an independent policy audit to find out if you have overpaid. Doing so could help you to recover hundreds and even thousands of dollars in overpaid premiums. To find out more go to Workers Compensation Audit.
We perform audits of policies at no charge to you. If there is no recovery there is no fee. You have nothing to lose.
Randy Russell, CPA