The “experience modification factor” looks at the
cost of your workers’ compensation claims over a previous three-year period and
compares it to similar industries
Institute a strong return to work program
appropriate for employees’ limited physical work abilities that returns
workers early, and is coordinated with their benefits. Line managers must
see the benefits of finding light duty assignments and be held accountable.
Conduct pre-employment, post accident and random
drug testing. Every company should have a zero tolerance policy in place.
Your employee or driver handbook must reflect this policy in detail.
Adhere to the robust safety program detailed in the
FMCSR’s. Strictly observing the regs will reduce both Comp and liability
events, and has the added benefit of limiting CSA
interventions. Safety programs should be more than a slogan on a website. No
program is effective unless senior management looks at addressing root
causes instead of just hoping an accident doesn’t happen again. The revenue
will be there; it’s how much of it you keep that counts.
Verify the accuracy of the e-mod computation.
Mistakes are very common. Challenge your broker or risk manager to do the
math and analyze the conclusions.
Report and manage claims promptly and properly.
Utilize a person or vendor with experience in claims handling; don’t just
delegate these important oversight duties to an HR rep or your Safety
Department. A strong advocate who has been a Comp adjuster or Comp lawyer
can ride herd on your claims saving real money.
Carry a large deductible and self-pay smaller
claims. You should only do this if you’re committed to have experienced
personnel seriously oversee your insurer's handling of claims. Large
deductible policies can come calling year after year with surprise invoices.
Insurers return collateral similar to polar bears giving up seal meat. These
policies look attractive for the low cash outlay at inception, but you'll be
financing old claims for years. And insurers have no sympathy. Watch out for
insurers selling "captive pools" where you are joined with others whose
losses are uncontrolled.
Review claims with the insurance adjusters on a
regular basis for all new claims and those over a specific reserve threshold
(e.g., claims with incurred reserves greater than $10,000). If your premium
is large enough, and your risk manager strong enough, you should enter into
a policy by insisting on certain additional service requirements.
Be aware of job tasks that seem to repeatedly cause
injuries; change the nature of these tasks. Fall downs while entering or
exiting trucks are more common now with aerodynamic truck designs. Safety
managers can enforce three point contact and the use of work shoes, etc.
Publish your e-mod to your line managers and hold
them accountable for losses and
incent them for safe operations. Management is typically only concerned with
operational efficiencies and gross revenues. They don’t often see the true
cost of a loss because it may not show up for years. Internally minimizing
loss exposures in reporting to senior management will hide the cost for now
– until the loss shows up years later with a giant reserve. By then the line
manager has already spent his performance bonus and also may be retired.
Good risk control behavior takes years to show up. So does bad risk control.
Announce a companywide rewards program for all
employees and management based on individual and total reduced claim
frequency. We all remember the signs posted at factories that touted, “This
facility has gone __ days without a lost time injury.” That worked then and
still works now.