Tighten Up Shop

Some of you business owners might have already been hit. Others might not even know it's coming. Workers Comp is on the rise. Now it might not, hopefully never will get to be, as bad as it was pre 2004 when you were paying somewhere around $4.80/per $100 in payroll. Legislation put an abrupt halt to that and managed to pound that figure down to $1.68 as it was in 2007. So how could the state manage to finagle a plan to create such a sudden decrease in rate, in such a short amount of time?

Well, we have come up with a few reasons why you will be seeing a 29.6% INCREASE in soon time here. What are the obvious reasons? Medical care is pretty obvious. Most carriers now have a specified group into which they place their insureds to try to control the cost of medical attention. Most of the time these facilities will provide the insurance carriers with discounts for using them instead of someone else. Carriers much rather you use their designated facilities for this reason. Do you as a business owner comply? Most likely. Their discount will reflect on your premium in some way or another. But, Medical Care will contribute to this rise.

Your employees behavior and personality is a very critical element when it come to layoffs. Another contributor to the rising cost is coming from the frequency of claims going up as people are going out. Fake an injury on the job before you sign your termination documents. It seems like a way to make a buck, collect disability, screw your employer...etc.. if you are the victim of a layoff. Sad, yes. Are people doing it? Of course. What does that say about our honesty and integrity in this world? Well, that many people are "sad". I would be sad too if I was victim of a layoff. Would I stage an injury? Definitely not! Don't go down that road. One thing that the WCIRB will not tolerate and do follow up on harder and harder each year are scams like these, but since it does happen often enough it does make things difficult.

Lastly, Legal costs. These alone can drive a business out of business. Legal cost are so outrageously expensive and can last months or even years. Higher limits or separate your limits insureds. There have been a few real cash drainer cases over the past few years that have been looked at as big contributors to the rise of workers comp today.

So there are a few legitimate reasons for this hike in price. So what are you going to do about it as a business owner? How do you fire back and balance out the premium? You need to look at how workers comp is priced. You need to be better, safer and communicate with your loss control specialist to make a work environment that isn't prone to accidents. The less claims your business has, the lower your experience mod will get. Your premium will still obviously rise with the trend, but at least you are fighting with a little more control and attention. I have also heard of a few carriers providing fixed rates. Now that's unheard of! 3 year fixed rates in a hiking workers comp.... pretty good deal.