The Top 6 Workers Comp Insider Secrets

For most organizations, employee related costs are one of the biggest drains on the bottom line. And workers compensation insurance is often the main drain. Unlike the price of gas, however, understanding these six workers compensation insurance industry secrets can help owners and managers aggressively control these costs. So what are they?

1. Insurance companies don't pay for your employee injuries - they just finance them for you.

Do you realize that oftentimes you pay $2 to $3 back to your insurance company for every dollar they pay out for your employee injuries? Each claim results in an extremely expensive financing contract. You pay your premiums. Then you have to pay for almost all of your claims. You pay:

• For employee injuries through lost dividends and return of premium
• Increased costs because your Experience Modification skyrockets
• Lost productivity
• Reduced morale for the unhurt employees who fill in for the injured employee
• Increased stress for management and staff

Workers Comp does not pay for employee injuries. You do!

2. Insurance Company Claims Management Services are usually horrendous.

Now that you know you write the checks for your employee's injuries you should realize how critical it is for you to demand aggressive claims management. Claims adjusters are snowed under with too many cases. Your injured employee doesn't get the attention he or she deserves. In spite of this, insurance companies continue to downsize as they strive to increase profits. Add Managed Care to the mix and your employee's claim is often outsourced to a case management company. The adjuster doesn't even know what is happening or how your injured employee is being treated. You just can't notify the insurance company your employee was injured and expect them to "do their job." You must have a proven process in place to minimize the cost of the injury and expedite your injured employee's return to work.

3. You are penalized and overpay when the "Audit Police" make a mistake on an audit

Because your real insurance cost is determined after your policy expires, it is essential the audit is correct. You're at a disadvantage from the start. The insurance company auditor knows the rules, you don't. The auditor is not compelled by law to explain the rules, even if applying a rule would cause you to pay a lower premium. Here's how the auditor works against you:

• Your entire payroll is put into the highest classification
• Then, the "standard class exceptions" are put into the correct cost classification. When someone is not properly moved to the lower cost classification, you pay at the highest rate.

Misclassification's are common and the system is designed for you to pay for all mistakes. Would you allow an IRS agent to conduct an audit without an expert on your side? Of course not. Then, why allow an insurance company auditor to conduct an audit without an expert at your side? A workers comp audit may actually cost you more money than an IRS audit. A workers comp audit is every year. You may go years without an IRS audit.

4. Experience modification factors are often wrong or mismanaged

Most insurance buyers accept on "good faith" that their experience modification factor is correct? Why? It's just easier that way. I go into great detail about this in my article Why Assuming Your Workers Comp Experience Mod is Correct Could be a Dangerous Calculation. However, for our purposes here, you need to learn how to double check your mod because oftentimes it may be wrong. Your insurance company then collects an unfairly high premium.

5. Your dividend may not be what it appears to be

If you were placed into a dividend program with the promise of future savings, at least be aware that these promises are often illusory. Did you just buy your workers comp policy based on that fancy proposal your agent presented or did you really read the contract that states the terms of your program? Realize that you pay a bigger premium upfront to finance the possibility that you will not have any claims. And if you do have a few claims, your dividend will magically evaporate.

6. Your money will fly away unless your agent pays closer attention to your Workers Comp than any other insurance buy.

Here's what your agent must do to insure you have the best value for your workers comp insurance:

• Claims need to be monitored
• Premium audits must be managed and verified
• Experience modifications must be double checked for accuracy
• Contract must be analyzed
• Sub-contractor's insurance must be controlled Many actions are time sensitive.

If you don't know why 6 months after your policy expires is such a critical date, you may be overpaying your insurance. If you need a specialist in any one area of your insurance program, it is in the management of your insurance that affects your employees the most- workers compensations, medical and disability benefits.

Author: Eric D. Patrick is an attorney and Chief Operating Officer of Consumers Insurance Agency Inc. http://www.consumers-insurance.com. He also engages in insurance consulting and legal work through The RiskAssure Consulting Group. Please contact him for further information.

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Steps to Filling Out Your Employee's Workman's Compensation Application

As a manager of a small business, you are in charge of protecting and helping your workers as much as possible. There are plenty of ways you can do this. Giving your employees good benefits, competitive wages, and protecting them with workman's compensation insurance can be a great start. Most small businesses know the importance of giving their associates good benefits and competitive wages, but workman's compensation insurance is often overlooked. Workman's compensation or worker's comp provides insurance to cover medical care and compensation for employees who are injured in the course of employment. The compensation is in the form of monetary value for medical bills and time the employee may need off to heal. Here are step by step suggestions for ways to make sure your employees are protected through workman's compensation.

The first step to getting started is to make sure you have received all the paperwork for workman's compensation. This paperwork included payroll reports that show how much money is paid out to your employees. Organize the paperwork and make sure everything is completely filled out and done correctly. The insurance companies will use these figures, along with classification codes to help determine how much the policy will cost you. The second step is to make sure you make copies of the accident reports even if the accident happened a long time ago. It is very important to make sure these accident reports detail the accidents that the employees have had during work. The insurance application will require you to make a list of information when you apply for the policy.

The third step is to make sure to compare prices for insurance agents. It is really important to shop around for the right insurance agent for the workman's compensation case. Do meet with the insurance agent and get as much information as possible pertaining to their hourly rates once you find the agent that is right for you. Filling out the application can be a tedious and very time consuming process. It is very important that all the information that you provide for the workman's compensation is as accurate as possible even down to the tiniest detail. It is very common that the information that is submitted is rejected unless the information is completely accurate. Along with the workman's compensation application, you may be asked to put down a deposit. This deposit is for the insurance premium when you submit your package.

It is important as the manager to make sure your company is open to field visit, if it applies to the situation. A field visit is when an insurance agent comes to your workplace. The insurance agent will take notes and observe your company's daily operations. It is a completely normal procedure and usually doesn't last for a full day.

The final step is really a no brainer, but is extremely important to follow. Make sure that your premiums get paid on time. This is such an important step that it is hard not to stress it enough. Once you follow the above steps, you will be able to breathe a lot easier. Your employees will appreciate your efforts to aid in their filing and in return you will have a happy staff.

Author: Peter Drummond is a social security disability attorney licensed in practice in Missouri and Illinois, and owns Drummond Law, a workers compensation and SSI benefits law firm with offices throughout Illinois and Missouri.

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What is a Workers' Compensation Case?

Let's start at the very beginning: Just what is a workers' compensation case? A workers' compensation case is any type of claim where a person has been injured or killed while on the job. The legal requirement is that the work injury arose out of and in the course of employment. The law does not require that a person is compensated for every work injury. You must prove that you were on the job working when you were injured. However, please keep in mind that there are special exceptions like falling in the employer's parking lot which is also considered a work injury, horseplay which is not considered a work injury, etc.

Under Iowa Law, you need only prove that a work injury caused a material and substantial aggravation of a preexisting condition for it to be considered a work injury. That means just because you have had a prior injury to the same body part, you may still be entitled to benefits.

Also, if you previously sustained a scheduled member injury (arm, leg, etc.), whether or not it was work related, and then you sustain another scheduled member injury then you may be entitled to additional benefits under the Iowa Second Injury Fund. If you qualify for 2nd Injury Fund benefits then the extent of your permanent disability benefits will be based upon the factors used when determining industrial disability just like a back, shoulder, neck or brain injury.

If you are able to prove that you sustained a work related injury, there are 3 basic types of workers' compensation benefits available:

1. Medical Benefits- Lifetime medical benefits for medical treatment, including doctors' appointments, prescriptions and mileage expenses related to your work injury.

2. Healing Period/Temporary Disability (TTD/TPD) Benefits- These are the weekly payments made to an injured worker while they are healing from their work injury and are either not able to return to their job, is only able to work a limited number of hours or is not making as much as they were before the work injury work.

3. Permanent Benefits- At some point the doctors will say that you have healed as much as possible which is also known as maximum medical improvement (MMI). At that point, your benefits change from temporary to permanent. If your medical condition heals and you are left with no permanent problems, then you probably do not have a claim for permanent disability benefits. If you have a permanent impairment rating and/or permanent restrictions, then you are likely owed permanent disability benefits. You need an attorney who understands the specialized workers' compensation laws.

Author: I offer a FREE Book entitled "Iowa Workers' Compensation- An Insider's Guide to Work Injuries" which includes the "7 Mistakes To Avoid If You Are Hurt At Work". Why offer a Free Book? For more than 10 years Iowa Work Injury Attorney Corey Walker has represented hundreds of Iowans hurt at work. He has seen too many clients make mistakes before they had the "right" information resulting in them losing thousands of dollars. Iowa Work Injury Attorney Corey J. L. Walker practices primarily in workers' compensation law throughout Iowa. Finally, you can learn about work injuries in the comfort of your own home with no risk or obligation. However, quantities are limited so to learn how to avoid costly mistakes and your rights Call Now (800)-707-2552, ext. 511 (24 Hour Message) or go to http://www.IowaWorkInjury.com

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What Is Liability Insurance?

Are you in business for yourself or do you work as an independent contractor? Imagine this for a moment....

You own a business and a young child falls and breaks his leg on your property. This is an incident that will have you asking, what is liability insurance? If you have it you will be protected from the high cost of lawyers to defend you and the medical bills you will have to pay for this child if you lose your case in court.

This is the reality of the world we live in. People sue because their coffee is too hot or because they are too stupid to look where they are going. It must be the companies fault because I slipped and fell over my own feet on their property. Nobody is willing to take blame for their own actions and this is why they want to call one of the bottom feeding lawyers that deal with personal injury cases and sue.

If they sue your business there is a good chance they will put you out of business or at least cause some damage to your growth. They will make you have to pay for lawyers and if you lose you will have to pay for the settlement amount or the court ordered amount that is determined.

This can cost you hundreds of thousands of dollars or even millions of dollars and can put you right out of business. You can, however protect yourself with liability insurance. This insurance will protect you from these lawsuits and can protect your employees from accidents and lawsuits as well.

You can choose the level of coverage you want and your liability insurance will even cover some or all of your attorney fees. This insurance can keep you from going out of business over something as stupid as being sued because you serve coffee that is too hot.

So, to answer what is liability insurance, you can only come up with one thing. It is your life, your business, your integrity, and your all time protection. It is what you need to stay in business and stay protected. It is better to have liability insurance and never use it, than to not have it and get sued and ran right out of your business.

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Author: Learn more about What Is Liability Insurance and why you need it here: What Is Liability Insurance?

Commercial Liability Insurance - What You Should Know About Commercial Liability Insurance

Are you considering going into business for yourself? If so, you need to consider commercial liability insurance to protect yourself from any visible or possible liability that might occur. This will save you a lot of money in the future, especially since we live in a sue happy society.

Commercial liability insurance will pay for part or all of the damages that are caused due to liabilities of the company. These could have been damages due to business dealings or not, but either way you will be covered. It could be something as simple as a child skateboarding in front of your office and they break their arm. If the family sues you will be covered and will not have to worry about paying thousand of dollars out of your pocket.

Most of the time your coverage will cover legal fees if you decide to fight the case as well or during the settlement period. It is necessary for your businesses survival to have adequate commercial liability insurance to protect yourself from expenses that you are not expecting.

One has many options of applying for commercial liability insurance. However it is the insurance company that, by using their underwriting standards, determines if the business is eligible for insurance and for how much. The insurance companies have classifications on businesses, and any new commercial liability insurance has to fall in one of those classifications. This means that even a company with a totally clean record might still have to pay a high premium for commercial liability insurance.

You will have quite a few different options when picking your policy. You can choose the type and the amount of coverage you want depending on the risks you think you might incur. There are certain classifications on businesses and underwriting will determine whether your business is eligible for liability insurance and how much you need to protect yourself and your business.

Imagine this for a moment.....

There was a bar in Indianapolis that over served a patron and the patron tried to drive home. This person ended up getting into an accident and injuring a young child. This child is bound to a wheelchair for life and has to be fed by another for its' entire life. The family rightfully so, sued the bar, the bartender, and the man who hit them. They won over $5 million dollar all together and the bar shut down, the bartender has half their wages garnished every week, and the man that hit them ended up in jail for over 10 years.

If this bar would have had commercial liability insurance to protect themselves from this horrible incident they could have stayed open, and just experienced a hike in their insurance rates. The bartender could have carried a type of liability insurance for themselves to protect them from this incident as well.

The moral of this story is you never know when something is going to happen and you are going to wish you had commercial liability insurance. It is better to start with it and not need it, than to not get insurance and end up wishing you had it.

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Author: Learn more about Commercial Liability Insurance and why you need it here: Commercial Liability Insurance