Workers Comp Insurance Rates Continue to Decline in West Virginia

Posted on August 19, 2013 by AJ Schrage

For the ninth straight year, workers comp rates will decline in West Virginia as reported (e. g. http://www.statejournal.com/story/22901779/wv-sees-reduction-in-workers-comp) in the last week or so by various news outlets.

Wste Virginia Workman's Comp Rates On The Decline.

Quote Your West Virginia Workers Compensation Insurance and Save With Lower Rates.

This means West Virginia will continue its streak of having workers comp rate reductions every year since privatization occurred.  The recommendation by the NCCI is for 8.8% reductions in the voluntary market and 8.5% in the residual market.

The current decreases are expected to take effect in November, and they will lead to an overall reduction in West Virginia workers comp rates of just over 48% since 2006.  Not surprisingly, this news has been widely lauded (e.g. http://www.exponent-telegram.com/opinion/editorials/drop-in-worker-s-comp-rates-good-for-west-virginia/article_b112f38c-f582-11e2-93b6-0019bb2963f4.html).

The trend in West Virginia is in stark contrast to national trends in workers compensation insurance.  Whether it speaks to just how broken things were with West Virginia workers comp insurance in the early 2000’s and before or other factors, another cost reduction is certainly welcome news for West Virginia business owners.

In any event, while most business expenses including workers compensation insurance rates have been continuing to increase in most parts of the country, that is not true with respect to workers comp rates in West Virginia.  In fact, workers compensation insurance rates have been increasing 5-10% per year in most states each of the last few years.

If it is time to shop your workers comp insurance in West Virginia, we have numerous potential carriers to approach.  Depending on business type, AmTrust, Applied Underwriters, FirstComp, The Hartford, Guarantee Insurance Company and Travelers are all strong carriers among others we represent for West Virginia workers comp insurance.  If you as a business owner are not getting as much benefit from West Virginia workers comp rate reductions as you should be, let us see if we can help with a WV Workers Compensation Quotes.

While West Virginia has its fair share of higher risk occupations, another positive of these reduced workers comp rates in West Virginia is that they evidence safer working conditions in West Virginia (and a reduction in serious on the job injuries).

Its great in its own right that West Virginia business owners have created safer and more productive workplaces.  It also shows the rest of the country that as statewide injury trends improve, it is possible to benefit from reduced workers compensation insurance rates.

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Contractors Workers Compensation- Bad News on Coverage Options

Posted on July 26, 2013 by Justin Bartmess

Why is it so hard to find affordable workers compensation insurance in the construction industry?

The construction industry in general is very difficult to locate reasonable options and rates when quoting workers compensation insurance.  A large majority of workers compensation providers no longer have an appetite for small construction or high hazard construction businesses.  Therefore, a lot of construction businesses default to the appropriate state fund or assigned risk pool for workers compensation coverage.

The state fund insurance or assigned risk is the most expensive option with the least flexible payment plan. 

Workers comp insurance for contractors

Factors that cause this difficulty include:

1.  General Construction Services – not specializing in 1 or 2 specific trades.

When a business does the same trade everyday the chances of a workers compensation claim is less likely.

2.  Height Exposure – workers compensation claims where the employee falls from a height in excess of 15 feet.

Historically the amount paid towards the claim is much larger than employees working 15 feet or lower.  Most workers compensation insurance carriers limit heights to 15 feet.  Anything slightly above 15 feet must show proper safety precautions taken.

3.  Unstable Industry – when the U.S. economy fell in mid-2000’s, the construction industry suffered the most. 

Workers Compensation insurance carriers who insure construction businesses suffered claims combined with reduced premiums paid by employers due to fewer employees.

4.  Sub-contractors or 1099’s – construction businesses are using more sub-contractors or 1099’s instead of hiring as w-2 to cut cost and employers responsibilities. 

If a sub-contractor fails to pay their workers compensation premiums and the general contractor is not aware their policy cancelled, most likely the general contractor’s workers compensation policy will be required to cover the claim.  Therefore, workers compensation companies do NOT like a large sub-contractor or 1099 exposure even if certificates of insurance are collected.

Ultimately workers compensation insurance comes down to profitability for carriers.  A lot of insurance companies lost money on the construction and contractor related segments of their book of business.  As a result, many carriers tightened their industry appetite to exclude or limit construction related NCCI classification codes.  The down side is contractors are paying more than ever for workers comp coverage and many have no option outside of the state’s assigned risk pool.

Currently the insurance market is still firming as rates increase and risk taking decreases.  However, as insurance companies return to profitable positions it is likely to open up insurance options for the construction industry.  Guessing when that is going to happen is the million dollar question.

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Workers Compensation Deductibles

Posted on July 26, 2013 by Josh Frerking

Insurance Deductibles- Are they worth it? What are my options?

Workers Comp Deductible Programs

Insurance Deductibles, by design, are meant to benefit both the insured and the insurance carrier. This is a way to provide further incentives to insured’s to be active in preventing and minimizing claims but is also a helpful tool to provide premium savings which can help with your bottom line cost of insurance. The purpose of this article is let you know of some options that are out there and the additional risks which these deductibles put on yourself or your company.

Most of us are familiar with the idea behind deductibles. The help create a mechanism to reduce your workers compensation premium.  Most employers look at this as a way to control and potentially lower their insurance premiums. This can be the case for most lines of insurance and they are very common in some more than others such as workers compensation insurance.

Seeing both sides of the picture is the idea to making sure you have no surprises and you are able to utilize deductibles to your advantage.

This is a pure example which brings me back to my first economics course in college. Trade offs (Guns vs butter). Funny of all the things for me to remember and if you don’t get this reference out some good Macro economics books at your local library( High quality reading material there).

A trade off is what you are giving up to get something else in return. A basic purchase is the most simple form of a trade-off (I give the soda machine $1 and in return it provides me with that cool refreshing beverage). Deductibles are the same thing; you are taking on additional risk in the form of paying a portion of claims in return for a lower insurance premium.

When advising my clients about deductible options I see a lot of individuals who tend to take it at first glance (Premium is higher than I would like, lets put a deductible on it). The point to focus on is what are you giving up and if that worst case scenario is to happen, do you have the capability to cover the deductible(s).

The trade off is premium vs. risk you take on personally. The deciding factors are the savings the deductible provides and the cash flow capabilities you have on any given day. This is true for Commercial insurance or personal insurance in making this decision. These deductibles could be per policy period or per claim. Its important to keep in mind as a $500 deductible per policy period might be feasible for you where if that same $500 is per claim (and lets say you have 5 claims) then you are on the hook for $2,500 in deductibles for those claims.

Workers comp insurance deductibles very common, especially on large premium accounts in excess of $50,000 in annual premium.  Deductibles become helpful in achieving significant premium decreases for the risk you are bringing on. Sometimes these deductibles can lower premium as much as 20-30% on many accounts. A couple examples of these are:

Straight Deductible

  • You pay up to the deductible on each incident and your insurance carrier

Aggregate Deductible

  • This is typically a per policy term deductible where you will pay all claims up until a certain amount.

Retro Plans

  • These are deductible plans which incorporate a minimum and maximum total payment to the carrier which incorporates the claims activity into the total premium you pay.

The basics of deductibles could be discussed further in depth as far as what options are the best for each risk, but the great thing about these various types of deductibles are the flexible enough to make sure their is a right plan to fit your company.

These various plans and other similar plans can be discussed with experienced Insurance Specialists like The Insurance Shop to find a plan that fits your company best.

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Workplace Safety Programs

Posted on July 26, 2013 by AJ Schrage

Safety Program

Every company should have a written safety program.  A good safety program protect a company’s employees, reduces costs and creates a more productive work environment.  Ultimately, effective programs help reduce the cost of workers compensation insurance and improve employers’ work comp experience modifiers.

The first step to a safer workplace is a commitment by management to create a culture which discourages unsafe conditions and behaviors.

Once there is commitment to a  safer workplace, accountability is imperative.  Expectation must be set for all levels of employees, from upper management to hourly employees and everyone in between.  All employees must then be held accountable for meeting the expectations of a company’s safety program.

Safety rules and procedures should be developed and communicated to employees, so that responsibilities are clear.  These rules should be posted in common areas and otherwise re-communicated to employees on a regular basis.  Having good safety rules is one thing, but they also must be enforced.  Supervisors must be accountable for enforcement and employees must be accountable for following the safety rules.

Training on safety rules and procedures is an important component of any safety program.  Training should start with new hire orientation and should cover, at a minimum, safety rules, information about the workplace environment and job safety responsibilities.  This early training can be used to demonstrate management’s commitment to safety and help create a safe workplace culture.

As much as possible, employees should be involved in the safety program.  They should be involved in establishing safety rules and procedures as well as participating in safety and training committees.  On-going training can increase employee knowledge and bolster injury prevention efforts.  Involvement on safety committees allows employees to be actively engaged in training efforts.

While I have previously written about efficient claims management practices and making medical attention immediately available in case of injuries, it is also important to have accident investigations when accidents do occur.  The goal should be to identify and eliminate root causes to prevent future occurrences of similar accidents.  On a related note, training and inspection reports should be documented and maintained in accordance with OSHA and any other applicable regulations.

Following these suggestions should serve as the backbone for implementing a good workplace safety program, which in turn should lead to fewer workplace injuries and a safe workplace culture.

Remember to leverage your safety program when buying workers compensation coverage and during the process of getting workers comp insurance quotes.  Many agents don’t ask about safety programs, but insurance company underwriters often discount your workers comp rates or give additional policy credits when written plans and programs are in place.

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Home Health Care Insurance

Posted on July 22, 2013 by Shannon Dye

As the Baby Boomer population ages, home health care is becoming increasingly popular. In fact, home health care is the largest growing segment of the health care industry, with experts predicting a 46 percent increase in home health care services from 2008 to 2018.

Elderly patients needing continued post-acute care after their hospital discharge can choose whether to go to a skilled nursing facility for treatment or to have medical professionals come to them at home.

What this means is that home health care agencies are opening their doors for the first time and are having to meet the States and Federal governments requirements for licensing, insurance, etc. The typical requirements for insurance include general liability and workers compensation coverage. While these policies are musts, they do not cover all the exposures and potentials for financial losses home health care agency may experience.

Home health care agencies assume a tremendous amount of risk.  There will be, unfortunately,  things that will occasionally go wrong with patients. Even the best health care clinician may encounter a difficult and adverse experience.

As a Home Health Care Agency owner, you have to be prepared for the legal and financial ramifications of things gone wrong. It is your responsibility to ensure that your clients, employees and your self are protected.

Health care offices and facilities have mistakes, problems and emergencies–but also the resources to deal with things gone wrong. Out in the field, clinicians working in other people’s homes have limited equipment and no other health care professionals around to assist. Treating in the field is riskier than providing care in a facility.

As an employer, you take on the additional risk of being unable to supervise your employees. Field clinicians are more difficult to support and to quality check.  Just as much as employees put you at risk in the field, so do clients. Each time you send a clinician into someone’s home, your employee is instantly at risk, as well. You have no idea what those homes are like, if the environment is safe and sanitary or what the people in that home are like.

Clinicians working in home health settings have can be subject to abuse and violence. Yet you are still subject to work environment standards set by the federal Occupational Health and Safety Administration.

It is extremely vital that home health agency owners know what coverage’s are available to them.  Professional liability provides home health are agencies protection for their agency and their clinicians. It protects against malpractice and clinician misconduct. Since owners are limited on the amount of time they can spend supervising their employees, professional liability provides them this protection.

There are other risks that an agency has outside of their clients homes. This is were general liability insurance is very important. General liability protects your business should injury or property damage occur to others as a result of your business operations.  For example, your clinicians drive on company business. You can be held liable both for accidents they may cause and accidents that may befall them. General liability insurance addresses your business decisions, business risks and general exposure to lawsuits.

Workers compensation is a must have for Home Health Care.  It is an insurance that most states require all employers to carry. For home health agencies, the fact that your employees’ work environments are the unpredictable home environments of their patients. Workers compensation protects you and your employees in the event that the employee is injured while working. Two of the most common injuries in the home health care industry is, back strains and trip/falls.

If you do not have workers compensation insurance, the employee may sue your company for their damages. One lawsuit could potentially cause a company to close their does due to the financial burden. This is why workers compensation insurance is important for all business owners to have.

Please take the time to review your current policies to ensure you are completely protected. If you do not have coverage, you need to contact your agent immediately!

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Obesity and Workers Compensation Insurance Costs

Posted on July 16, 2013 by Melinda Langworthy

We all know that obesity is a huge issue here in the United States but did you know obesity is also an issue when it comes to workers compensation claims.

Obesity dramtically effects the cost of medical claims for workers compensation insurance.

Studies have shown that work related injuries are far more costly if the injured worker is obese. The medical costs are dramatically higher for obese workers. The types and nature of injuries sustained by obese workers, especially the morbidly obese, are more likely to result in permanent disabilities.

How can employers help their employees get healthy and change these studies?

We cannot change people but we can change the way we motivate people to live a healthy life style. If motivating through the work place is what we have to do then so be it. I recently moved from Colorado where in 2009 had the least amount of obesity.

I do know as of Jan. 2011 Pinnacol Assurance (Colorado’s State Fund) implemented an employer wellness program. Pinnacol issued credits on policy’s that had 100% participation from employees. It would be the responsibility of the employer to motivate and encourage employees to call and do their part with their assigned heath coach. Several of my clients came up with great ideas for rewards if everyone participated.

When the Agency owner started this program, I thought it is was none of my employers business how healthy I was. I understand now that it is essential for employers to care about their employee’s health.

I know there is a fine line between what is private and what can be considered helpful. However if work comp carriers and employers can encourage safety why can’t they encourage healthy lifestyles as well.   http://www.walkingspree.com

If billions of dollars lost is not a wake-up call to employers to help their employees get fit and stay in good health, perhaps the secondary side effects will be; A primary benefit of reducing obesity in the workplace is having happier and healthier employees, who are also more productive and take less time off due to illness related-problems.  

“As a society, the message is clear. As important as education is to our future, so is our health. If we are not a nation of educated people, we will not lead the world in emerging high-tech areas. If our children are not fit and healthy, they will not be able to perform at their optimum level,” said Dr. Mitchell Roslin, a bariatric surgeon at Lenox Hill Hospital in New York. ” No child left behind has to mean more than just reading and arithmetic, and cannot separate health, fitness and emotional maturation,” he said

Center for Disease Control and Prevention study estimates 42 percent of U.S. adults will become obese by 2030. I understand society gets up in arms when others tell them what to do or what we should do but how else are we as Americans going to get healthier.

We clearly can’t do it all on our own I think we should welcome all the help we can get. Nobody can argue medical costs are rising and I don’t think that is going to change. The key is to reach an employee population early. This issue may not have seemed imperative in the past years but with a rise in both workers comp rates and increasing non-renewals,

I believe it’s time for insurance agents and brokers to discuss obesity, health and wellness issues with employers and business owners.

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Day Care Insurance

Posted on July 16, 2013 by Shannon Dye

Day Care Facility Insurance Matters

The need for quality child care has increased drastically over the recent years, partly, due to a rise in families with two parents working. Child care workers held about 1.3 million jobs in 2008. About 33% of child care workers were self employed, family child care providers according to the U.S Department of Labor.

What this means is, day care centers are opening their doors for the first time and are having to meet the States and Federal governments requirements for licensing, insurance, etc.

The typical requirements for insurance include general liability and workers compensation coverage. While these policies are musts, they do not cover all the exposures and potentials for financial losses a day care center may experience.

It is extremely important that day care facility owners know what coverage’s are available to them. A standard general liability policy may not cover abuse, neglect, molestation, kidnapping, injuries that incurred away from the center, such as field trips, and injuries in automobiles, just to name a few.

Here are some examples of why these coverages are so important: A child suffers bodily injury while on your playground equipment. The parent of a child enrolled in your program makes a false charge of abuse or molestation against you; One of your employees/volunteers trips and spills hot soup onto a child; Emotional distress to the parent of a child enrolled in your program caused when you did not obtain a permission slip to take them on a field trip.

Carries such as, USLI and Philadelphia Insurance Companies, have specific programs designed just for childcare centers at affordable rates.

These childcare center programs offer: Child Care Center Professional Liability including teacher’s acts or omissions as a Child Care Centers Provider, Coverage for fields trips, Abuse and Molestation coverage, Business Income coverage with a $300,000 limit is included on Property Elite form, Large Excess Limits available, Corporal Punishment coverage available, Excess Medical Payments coverage available, Auto coverage includes buses, 15 passenger vans and private passenger vehicles and Coverage for after school programs as part of the Child Care Centers. These are just some of the items that Philadelphia provides.

As caretakers of children, the owner and the staff have the duty to act with reasonable care while caring for children in their custody. Sometimes children get hurt in accidents even when they are under the best of care. However, if a child is injured while under the care of your program, the parents might sue the center if they believe the injury was the result of the negligence of the center or the staff.

Without the proper insurance coverages, the center will be responsible for all costs associated with the claim.

All childcare centers need to ensure that the children, the center, and their employees are protected. One claim could cause a business to have to close their doors if not properly insured. Please take the time to review your current policies to ensure you are completely protected. If you do not have coverage, you need to contact your agent immediately!

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Purchasing Insurance Online vs The Agent on the Corner

Posted on June 26, 2013 by Josh Frerking

When purchasing insurance, many people have treated this similar to other basic life purchases such as getting groceries from your local grocery store, furniture from your local big box store or family owned furniture store, or a car from your local car dealership.

This has been a way that salespeople have made their mark on communities by being seen and finding new ways to either benefit from their everyday hobbies and translating those activities into meeting new prospective clients like you and me. As technology has evolved salespeople have had to evolve to compete with what was a new phenomenon of online business.

Your traditional insurance agent on the corner office has thrived for decades by providing the personal service and personal connection to your community that keeps you from shopping moving your insurance business.

The traditional insurance agent has been able to know your community and able to work with a few different carriers to shop your coverage and make sure the policy you are with is the best fit. They often provide a personal touch and provide the ability to call and speak with a real person instead of an answering machine, which most insurance carriers have even to get a simple question answered.

There is no question there are many online operations just quoting the state minimum coverage and price only factor policies like Geico, but there are a lot more options out there.

Online insurance agencies are something we are seeing people open up to more.  Many of these online agencies can provide the same, or better service, service than your traditional agencies and much more.

With online-based agencies like The Insurance Shop, you get the personal touch of having a real person over on the phone, Agents are able to match you with an insurance carrier whose policy has the best fit available.  Our agents are always in the office and available to help customers.

Our national workers compensation, general liability, and other commercial programs enable us to contract with now over 30 different insurance carriers directly (as opposed to maybe 5 or 6 for many agencies).

This means that your policy is being compared to and shopped with more carriers to ensure the best possible rates on all lines of insurance.  The coverage you obtain from online agencies can provide the same level of service and coverage as what your local agent has provided for years but with more competition brings lower premium and better coverage.

Consider a high quality online agency the next time you shop business insurance for your next commercial insurance policy.

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Workers Compensation Basics

Posted on June 4, 2013 by AJ Schrage

The Basics of Workers Comp Insurance

Workers Compensation Insurance can seem complicated and overwhelming at first.  However, a professional from Workers Compensation Shop can simplify the process for you as much as possible.  This article should provide you with the basics for workers compensation insurance.

The first question many business owners ask is whether they are required to have workers compensation insurance.  In most states, employers are required to obtain workers comp insurance if they have any employees.  In a few states, there can be exemptions if there are only a small number of employees.  State laws must be checked with respect to whether there is an exemption from having to obtain workers comp insurance for a small number of employees.

Owners and officers of a company often have an option to reject workers comp coverage.  It is more complicated to evaluate whether workers comp insurance is needed if 1099s are involved.  Uninsured sub-contractors are often treated as employees of a business if they are injured on a job.  Currently, Texas and Oklahoma are the only states where businesses can opt out of workers comp if they comply with other requirements.

As most businesses are required to have workers comp insurance, it is important to understand what it is.  Generally, workers comp insurance provides a no fault remedy to employees injured on the job.  Workers comp insurance allows businesses to meet their statutory and legal requirements while providing the predictability of an exclusive remedy for on the job injuries.

Workers compensation benefits may include payment or reimbursement of medical expenses, weekly payments in place of wages, compensation for past or future economic loss and benefits payable to dependents of employees killed on the job.  Workers comp insurance policies generally do not cover damages for pain and suffering or for punitive damages assessed as a result of employer negligence.

Since most business are required to have workers comp insurance, the next question is where can one get it.  The two primary avenues to obtain workers comp insurance are through private insurance companies and through state funds.  Most of the time, a professional at Workers Compensation Shop can assist you with the most appropriate of the two options for your business.

The last basic question on most business owners’ minds is how much will workers compensation insurance cost.  In general, cost is determined by how a business’ employees are classified and the payroll for a year.  Credits, debits, experience modification factors and/or dividends may impact the cost of a policy.

An estimate of annual premium can be obtained by multiplying the annual payroll/100 by the base risk classification rate by the experience modification factor (which will generally exist if an insured has had 3 prior continuous years of coverage and pays more than a certain premium threshold per year).

In March, I wrote about how claims management could be used to control long-term workers comp costs (http://blog.workerscompensationshop.com/insurance/workers-comp-claims-management-practices-help-control-costs/).

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What is the NCCI?

Posted on June 3, 2013 by Tim

Everyone that is significantly involved with the workers compensation industry is familiar with the NCCI and their role nationally. What is forgotten, however, is the fact that most employers don’t know about the NCCI and why that organization is important.

First things first, NCCI stands for National Council on Compensation Insurance and as advertised in the name, they serve as a general council. The NCCI frequently gathers data on claims and industry information, analyzes trends, and offers rate and loss cost recommendations.

The NCCI is the National Council on Compensation Insurance.

What does the NCCI do that impacts me as an insured?

Most importantly, the NCCI administers and calculates the experience modification rating and the X-Mod worksheets for insured’s in roughly 34 states. The experience modifier (or emod) directly impacts what an insured pays for their workers compensation coverage.

The standard, or base modifier is a 1.00. This means that whatever the calculated premium is for a client, it is then multiplied by the experience modifier to create that client’s true premium. Think of an emod as a credit score for work comp. It is a reflection on how many claims a company has had, in comparison to the amount of claims other company’s have had doing the same type of work.

If the mod is above a 1.0, this means a company has had more claims than would be expected and thus, they pay an extra premium because of their poor loss history. If the mod is below a 1.0, this means a company has had fewer claims than expected and gets a discounted premium as a result.

NCCI Class codes are another important reflection from the NCCI. Every insured has one or multiple class codes assigned to their policy, based on the type of work that company performs. A class code is a 4-digit code that best represents the type of work an employee does for a company. For example, a painter would go in class code 5474 for most states.

Pricing is built around the class codes and the historical loss history surrounding that code. If a class code has a high frequency or high severity of claims historically, it will be more expensive … which makes sense. Someone is more likely to get injured painting the outside of a house on a two-story ladder than someone who sits in an office all day (class code 8810). Thus, the rate a carrier charges will differ based on the class codes.

The NCCI is also in charge of collecting and analyzing data surrounding workers compensation, so they are the ones who are helping carriers know for sure that there are more claims in the painting class code than in clerical. Based on these facts and figures collected, the NCCI also offers suggestions to the Department of Insurance in most states on whether they should adopt price increases or price decreases. The NCCI has no authority on whether a state can adopt an increase on their assigned risk pool policies, but their opinion is heavily weighed as it comes with the best data analysis in the industry.

Finally, the NCCI manages the assigned risk pool (or state fund) for most of the 34 states previously mentioned. Insurance agencies like The Insurance Shop can place workers compensation policies for clients through the assigned risk pool in these states when an insured has no options on the voluntary market.

As the industry continues to be more cautious with it’s underwriting strategies, we have seen a significant increase in the need to write assigned risk pool policies. In the first quarter of 2013, our agency has helped hundreds of insured’s get coverage that they weren’t able to get on the open market.

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