Severe workplace injuries can become powerful detractors that can impact employee morale, reduce company productivity and bottom-line profits, and even damage public or investor relations.
“If an employee is injured on the job so severely that he or she is not able to return to work, other employees have to pick up additional responsibilities,” says Connie Harding, vice president of Hilb, Rogal and Hobbs. “Unmanaged, this may lead to additional injury claims and soft costs, and produce a costly workers’ compensation experience modification.”
Smart Business spoke with Harding and Christina Butz, who is HRH’s Southeast Region vice president of claims, about strategies for aggressive claims management and proactive loss prevention.
What is the status of Florida workers’ compensation insurance?
Harding: The workers’ compensation market is soft. There have been solid legislative changes over the past several years that positively impacted rates, including legislation to lower overall claim costs. There are loss-sensitive plans available that can lower premiums or produce dividend returns. Cost savings from Florida’s lucrative workers’ compensation programs could help offset the high costs of other lines of insurance in the state.
What errors are being made with respect to risk management?
Harding: Most companies today have comprehensive safety manuals and good commitment from management. An area for improvement lies within the claim management process. Once a claim occurs, it is critical to share information with the adjuster. Companies often do not appoint somebody with authority, and with knowledge of the adjusting process and statutory experience, to stay in contact with the claims adjuster to share information.
Adjusters can only do their job according to the information they have in hand.
For complex risk management accounts that meet certain premium requirements, risk management and insurance services firms can implement licensed specialists that liaise between the insured and the claim adjusters to ensure that the adjusters are aggressively managing claims and keeping communication flowing between the client and the insurance company.
What strategies should be considered for companies with poor loss histories?
Butz: Any strong risk management program begins with top management and should be woven into the company’s culture and policies. Risk management, including reducing the frequency of losses and claim costs, must be a priority, much like producing a quality product or service.
Harding: Companies with complex claims will benefit from tapping their insurance services firm’s expertise and programs. These firms’ specialists first would conduct a thorough review of the company’s claims history for the past five years, looking for trends on similar types of losses. Once a trend is identified, a plan can be designed to help eliminate these types of claims.
Second, a review of the company’s safety manual, safety procedures and management’s commitment to safety may expose problem areas.
A third, critical step is a review of hiring and screening practices.
Finally, there is an assessment of the current claims management process.
What are other proactive strategies to be considered?
Harding: A strategy that produces good results is a safety incentive program for employees. The program can tie a good safety record to getting an end-of-year bonus. The financial reward helps create a buddy system so employees are watching that other employees use safe practices, even if supervisors aren’t on hand to oversee.
For companies with non-English speaking employees, a bilingual staff member should be trained to properly communicate safety issues and loss prevention policies, and to assist with the claims process.
How does risk management impact other company functions?
Harding: A severe loss takes management and employees away from their main responsibilities. It can also become emotional because many employees have become friends. Additional claims can occur as fatigued employees must pick up additional responsibilities and may not be paying close attention to or are not familiar with added safety practices. This all translates into the loss of additional dollars or ‘soft costs.’ Like the domino effect, a poorly managed claim can lead to a loss of production in many areas of the organization.
Butz: A responsive workers’ compensation program provides injured employees with prompt medical attention and assistance following an on-the-job injury that expedites their return to work. It also demonstrates the employer’s commitment to valued employees.
CONNIE HARDING is vice president, Hilb, Rogal & Hobbs. Reach her at (941) 554-3113 or Connie.Harding@hrh.com. CHRISTINA BUTZ is Southest Region vice president of claims. Reach her at (954) 714-6000 or Christina.Butz@hrh.com.