Workplace injuries are costing your business money in a many ways; increased insurance premiums, cost of hiring and replacement, lost efficiency, additional training, increased paperwork and administrative costs, and more.
When I speak with business owners and CFO’s they often tell me, “the rates are what they are so there is nothing you can do to change what I pay for work comp.” While the state and the NCCI (National Council on Compensation Insurance) do set the class code rates in Florida, the employer has much more control over their premiums than they initially think.
What Employers CANNOT Control:
The state sets the rate. Standard rates for Workers’ Compensation policies in the state of Florida are set by the NCCI. That means, whatever “class code” the job description of your employees fall into, is the rate you pay. Rate x Payroll = Standard Premium. But did you know, there is another factor that affects the rates you pay? And you have control over it!
Here’s What You CAN Control:
The Experience Modification Factor (The MOD). Every business that is subject to Workers’ Compensation develops their own MOD over time. The MOD is essentially a multiplier of your rates. It can (sometimes drastically) cause your Work Comp premium to increase or decrease based on how your most recent 3-year loss history compares with your competitors. The equation NCCI uses to calculate your MOD is complicated, but to simplify, if you have more Work Comp claims than your competitors and the claims dollars are higher, you are going to have a higher multiplier (MOD) than they will.
How You Can Control The MOD:
If your company has average claims frequency and costs, you’ll have a MOD of 1.00. If your claims frequency and costs are higher than your competitors, you’ll have a MOD greater than 1.00. If they are lower than your competitors, you’ll have a MOD less than 1.00.
Here is an example:
- Company A and B both have a base Work Comp premium of $50,000. Company A has lots of claims and a MOD of 1.35. Company B has very few claims and a MOD of 0.65.
- A’s Premium Calculation: $50,000 X 1.35 = $67,500 (That’s 35% more than their average competitor.)
- B’s Premium Calculation: $50,000 X 0.65 = $32,500 (That’s 35% less than their average competitor and less than half of A’s premium!)
Depending on the size and scope of your business, it may be unrealistic to eliminate all workplace injuries. However, the handling process is extremely important to reducing the dollar value of the claim. At Gulfshore Insurance, we work with you and provide materials, training, and awareness for your employees. We also have in-house Claims Specialists who are licensed adjusters, navigating each claim on your behalf.
Jeffrey Sanders, TRIP is Client Advisor at Gulfshore Insurance. Jeff works with a wide range of business clients to deliver strategic risk analysis, guidance, and insurance. Comments and questions are welcome at firstname.lastname@example.org
Hundreds of construction workers are killed every year from ladders and scaffolds, and many thousand more suffer serious injuries that are permanently disabling. And it is estimated that more than 30% of workers compensation claims costs stemming from construction sites are the result of falls from elevated surfaces.
A recent study indicated that injuries related to falls from elevated surfaces are more severe than other injury claims because these accidents result in more time away from work, damage to multiple body parts, and more short- and long-term disability leave.
Do Not Let These Accidents Happen to You
- A worker, who was standing on the top of a stepladder, fell when the ladder shifted. He suffered a spinal injury and was out of work for four months.
- Another worker failed to secure an extension ladder at the top and fell 20 feet when the ladder slipped away from the wall.
- Two men were working high up in a building atrium when their scaffold collapsed. They plunged four stories to a concrete deck. One man was dead on arrival at the hospital; the other was in critical condition.
- When a three-story wooden scaffold collapsed, two workers fell to the ground, suffering serious neck and back injuries. A third man working under the scaffolding was also injured.
It’s crucial for construction companies and their workers to implement regular safety training — and put that training to practice. Linked below are several helpful OSHA resources and fact sheets to improve worker safety at your organization:
Update! OSHA extends deadline to December 15, 2017.
Reminder, employers are required to submit their completed 2016 300A form electronically to OSHA by December 1, 2017. Two categories of employers must submit information from their injury records.
- Employers with 250 or more employees, at any time during the year – Starting in 2018, these employers will be required to submit the previous year’s OSHA forms 300A, 300, and 301 once per year.
- Employers with 20 or more, but fewer than 250 employees, at any time during the year, and the business operates in one of OSHAs predetermined high-hazard industries – Continuing on in 2018, these employers will be required to submit the previous year’s OSHA form 300A once per year.
- Employers not falling in one of the two above categories, must submit information only if OSHA notifies them to do so, but are still required to complete and maintain the information on-site annually (unless otherwise exempt from the recordkeeping requirement).
The high-hazard industries include construction, landscape (other than design), manufacturing, wholesale trade, utilities, agriculture, grocery and department stores, many types of residential health-care facilities, freight trucking and warehousing.
OSHA Records Submission Training
Gulfshore Insurance’s step by step tutorial will walk you through the process to electronically submit your 300A forms for 2016 injury and illness data online via the OSHA Injury Tracking Application. For more information on the new recordkeeping rule, click here.
Hurricane Irma’s historic size and impact have been felt throughout the state. In addition to its impact on Floridians and their property, Hurricane Irma has the potential to impact your insurance after the fact. It is important to make sure you have the proper coverage in place before accepting projects outside your normal scope of operations; leasing and operating new equipment; or hiring new sub-contractors.
Below are several important post Hurricane Irma considerations to make.
WORKERS’ COMPENSATION: Employees may be working extensive overtime hours or you may be hiring temporary sub-contractors.
- Consider increasing payroll exposures now so your work comp audit is not negatively impacted at year end. Be sure to break out overtime pay so that at the time of the premium audit, the auditor will be able to discount it back to straight time. If the auditor cannot readily break out the overtime portion, it will be used in calculating the premium.
- If hiring temporary workers or sub-contractors, make sure those workers have insurance and obtain proof of coverage. If hiring a subcontractor who does not have workers’ compensation coverage or it gets cancelled and one of the sub’s employees gets hurt, the responsibility for that injury can fall to you. This will ultimately impact your work comp experience mod and insurance premium. It’s the same situation when hiring an exemption holder. If that exemption expires and the subcontractor does not renew it in a timely fashion, that sub is no longer exempt. If he/she is hurt on the job, a claim can be filed against your company to cover the injury. To quickly look up the status of a sub-contractor’s work comp insurance, you can do so here: Search for Proof of Compliance
- If undertaking or bidding projects outside of your normal scope of operations ensure you are aware of the appropriate class codes and rates for that work. Workers’ Compensation class codes are specific to the type of work being performed, and the rates can vary greatly. New or complimentary operations often require additional class codes being added to your WC policy. Make sure you’re aware if the new class code comes with a higher rate, so there will be no surprises at the year-end audit.
EQUIPMENT FLOATERS & INLAND MARINE: Leasing & operating temporary equipment could put you at risk.
- If you lease temporary equipment, then you should verify the limits of your insurance coverage and possibly increase your coverage limits.
- Unusual equipment often requires special coverage. In addition, renting equipment with an operator will require proof of insurance for the operator as well. Some equipment, such as cranes or lift trucks with large booms require special coverage and needs to be discussed with your Account Manager or Client Advisor to ensure it is properly covered for weight of load, tipping, etc.
- In addition, if you are renting a crane with an operator, the rental company should be providing the coverage – for the equipment, employee (workers’ comp), and any associated general liability for operating the crane. Be sure to review the rental agreement with your Client Advisor or Account Manager to make sure that you are protected and that you obtain proof of coverage from the crane company.
MOLD: Do not end up with a mold-related lawsuit; have the proper coverage in place.
- With hurricane related water damage, inevitably comes mold. If you become involved in any mold mitigation projects, make sure to have proper pollution and professional coverage in place. Without it, you will not be covered against claims from removal, disposal, or cleanup work.
GENERAL LIABILITY: Policy exclusions may impact the scope of work you are taking on.
- For companies that have never worked on residential projects and might be taking on that type of work following Hurricane Irma, it is important to note that you may have policy exclusions that restrict your coverage. Sub-contractors may also have exclusions to their policies for residential, condo, or multi-family work, so it’s critical to verify there are none of these exclusions on your or your sub-contractors’ General Liability policy, prior to performing any of this work.
It is important to discuss these considerations with your trusted Client Advisor or Account Manager at Gulfshore Insurance to ensure you have the proper protection. If you have any questions or concerns regarding this information, please contact us. We are here to assist you and happy to answer any questions you have.
The Office of Insurance Regulation has received the 2018 Florida workers’ compensation rate filing by the National Council on Compensation Insurance (NCCI), which proposes a statewide average premium decrease of 9.6%. This includes a statewide average rate decrease of 9.3% and a reduction of the fixed expense cost applicable to every workers’ compensation policy in Florida from $200 to $160. The new rates would become effective January 1, 2018.
As always, the Office will review the filing to ensure the proposed changes are not excessive, inadequate, or unfairly discriminatory and evaluate its potential effects on the insurance marketplace and employers, who are required by law to carry this insurance on their employees. A public rate hearing will be conducted in October.
NCCI is a licensed rating organization authorized to make rate filings on behalf of workers’ compensation insurance companies in Florida. For more information about the filing, read the NCCI press statement.