When it comes to Workers Compensation claims, companies are looking constantly for ways to reduce claims and reduce costs.
Ascribing the cost of Workers Compensation claims to applicable internal departments can encourage supervisors and managers to pay more attention to training and safety programs and more carefully monitor injured employees returning to work. Some companies have even deducted the claim cost from the budget of the ascribed department instead of a general company fund as an additional incentive to curb Workers Compensation costs. Through implementing a few procedures that place Workers Compensation expenses directly on internal departments, employers have more control over prevention and injury management measures that can decrease the severity and frequency of workplace injury. The reduced claims and Workers Compensation premiums add up to a substantial amount of savings.
Safety goals can be met by communicating directly with all potential Workers Compensation employees. Use a claim and injury history to identify high-risk employee groups. Then, on a departmental level, discuss the injury management process with employees. Communication will improve as employees are given a chance to discuss how they feel the job could be performed with less risk of injury. It also gives the employer an opportunity to modify safety procedures or dangers in the work environment, such as faulty equipment or inadequate work protocols that are identified by employees.
A common problem related to workplace injuries is a lack of prompt reporting. Too often supervisors don’t appropriately acknowledge workplace accidents. The hope is that the incident will not result in time off of work or medical expenses. However, putting an initial injury off and not reporting it immediately often actually results in increased costs. Managers and supervisors need to know that they aren’t saving money when they don’t report injuries immediately. One study of more than 50,000 temporary total disability and permanent partial disability claims showed:
- Injuries reported one to two weeks following the incident were 18% more expensive than those reported within a week of the incident.
- Injuries reported three to four weeks after the incident were 30% more expensive than those reported within a week of the incident.
- Injuries reported after four weeks of the incident were 45% more expensive than those reported within a week of the incident.
Showing supervisors and managers statistics such as these will help to ensure timely injury reporting, especially if Workers Compensation costs will be coming out of the departmental budget. Although the goal is prevention of workplace injury, once an employee has been injured, the objective should turn to a timely and safe return to work. This can best be achieved if both employer and employee share a desire to obtain the most effective care, which will help to expedite recovery and a safe return to the job.
Since each department is faced with the claim cost coming out of their own budget, managers and supervisors can take a more active role in assisting injured employees returning to work. For example, instead of the usual claim adjuster or attorney contacting the injured employee, the company concern can be conveyed through the department head(s).
One last element is fraudulent claims. Although deliberate fraudulent claims are a rarity, they do exist. These fraudulent claims will be much more difficult to file when Workers Compensation costs are analyzed departmentally.
Accidents are going to happen. There simply isn’t a way to prevent all accidents and eliminate all claims. But, it is realistic to reduce the frequency and severity of workplace injuries by making the department responsible directly, whether by penalty or by reward, for a safe work environment.
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Pollution and environmental exposure risks on site and during transfer and disposal, such as toxic mold, the disposal of contaminated soil, and broken pipelines releasing toxic materials, are major construction concerns. When such incidents happen, a contractor’s reputation and livelihood can be irreversibly impacted.
Contractors Pollution Liability (CPL) is a type of insurance designed to protect contractors against the liability issues and financial losses that result from such environmental incidents. This insurance covers an array of environmental and pollution risks that are common to construction projects and is considered an appropriate coverage whether a firm is a trade contractor, such as those specializing in paving or HVAC; a general contractor; remediation contractor; or a contractor doing specialized work, such as tank installation or drilling. Contractors Pollution Liability insurance is available to cover areas like pollution incidences that result in bodily injury, third-party property damage, or remediation costs. Comprehensive policies can even be customized to provide pollution risk coverage to an entire project, which would include off-site transportation and all contractors involved in the project. Most Contractors Pollution Liability policies are written on a claims-made basis. This basis limits the insurer’s risk for unknown future liabilities since it means the policy only pays claims occurring and being filed during the period covered by the policy.
Clearly, Contractors Pollution Liability insurance can provide invaluable protection against environmental-related financial losses. That said, such a policy doesn’t prevent environmental incidents from occurring in the first place. To help prevent environmental incidences and protect hard-earned reputations, contractors should additionally adopt effective environmental risk management practices.
Creating an environmental risk profile will be one of the most important factors when taking steps toward risk management. This allows the firm to identify possible loss exposures and risk areas by thoroughly reviewing their administrative control documents. While some firms opt to conduct the profile in-house, many prefer the expertise and outsider’s perspective offered by a professional environmental consultant. In any event, documents related to the following areas should be reviewed during the development of an environmental risk profile:
- Contractors Pollution Liability policies
- Standard client agreements
- All mold prevention programs
- All environmental management programs
- Subcontractor’s environmental/mold management/prevention systems
- Language of subcontractor agreements
- Environmental data searches of job sites
- Hazard communication programs
- Quality assurance programs
- Internal health and safety programs, incident response protocols, and training protocols
- Trends, history, corrective measures, and employee communications related to environmental losses
- Environmental assessments for all leased and owned properties
Once the above documentation is assessed, the firm can identify strategies to reduce, if not eliminate, their exposures to environmental risks. Combining risk management with a Contractors Pollution Liability policy can help contractors reduce their risk, but still be covered in case the unexpected happens.
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Is everything possible being done to protect your company from the costly impacts of Workers Compensation claims? As an employer, you know that injuries will happen. However, this doesn’t mean you shouldn’t try to prevent them by knowing the dynamics and some of the solutions recommended by the experts.
Minor Injury, Major Claim. It’s the small injuries that often result in big claims. Some statistics show that 80% of workplace injuries are inconsequential, meaning they just require first aid or a trip to a physician. Eight percent of such claims are sprains and strains to the neck, back and various joints. However, these types of injuries account for an estimated 80%-90% of the system’s costs. Major claims are likely to follow if the frequency of such seemingly inconsequential injuries isn’t addressed.
Falsified/Exaggerated Claims. Claims that didn’t actually occur or that occurred outside the workplace are only representative of a small fraction of claims. However, employers can implement tip lines, video surveillance, drug screenings both before employment and after accidents, and so forth to reduce false claims:
The larger problem is from exaggerated injuries. Employers can take these steps to address exaggerated claims:
- Get injured employees immediate and appropriate treatment.
- Even if duties need to be temporarily modified, get injured employees back to work as quick as possible.
- Ensure supervisors communicate with injured employees and convey their concern and support.
- Do as much as possible to reduce the disruption employees may face post-injury.
- Assess and address behavioral issues that could be driving an injured employee’s disability.
Observing Patterns. Experts have recognized that there are patterns of reoccurring claims within groups, such as among certain industries or particular groups of employees. For example, more injuries may be seen in equipment operators that don’t receive proper eye screenings. Overweight employees tend to have more injuries than those of an average weight. The healing of injuries may be longer and more difficult among diabetic employees. Overexertion, meaning doing too much; too fast; and/or too frequently, is one of the primary causes of sprain and strain injuries. This often comes from an employee demanding more of their body than it’s capable of doing. The challenge is that this is a human behavior. Studies have shown that the majority of workplace injuries are from unsafe acts, not unsafe conditions. In other words, even in the absence of workplace hazards, injuries will happen. Additionally, there are also patterns of reoccurring fraudulent and exaggerated claims, such as an employee that seems to repeatedly have accidents.
Claim Reduction. Begin at the hiring process, ensuring that potential employees are capable of doing the physical and mental demands you’ve listed in the applicable job description. It’s important to understand that injury prevention must be embraced at the leadership level to be effective. Statistics show employees are most likely to have injuries when they feel their management doesn’t care. You might also consider:
- Excellent workplace safety programs.
- Efficient communication programs that allow you, injured employees, and insurance adjusters to easily communicate.
- A post-injury protocol, specifying the immediate reporting of an injury to appropriate personnel.
- Routing injured employees to seek medical care from a provider specializing in occupational injuries.
- Staying in touch with both the injured employee and their medical provider, making sure that you communicate your concern and care to the employee as they recover and accommodate any physical restriction recommended by the provider upon their return.
Cost Mitigation. Employers can take several routes to reduce the financial impact of claims. Transitional duty programs that enable an injured employee to continue some capacity of working as they recover would be one example. Research shows that around 40% of employers don’t currently have a transitional duty program. Another example would be referencing treatment guidelines to determine typical recovery times for various injuries. This information can be used to approximate how long it should take an injured employee to be treated and recover. Employers may consider having an on-site clinic for employees to go for both acute injuries and everyday health issues. Partnering with a physical therapy network may be a consideration. Research has shown that companies affiliated with physical therapy networks see injured employees returning to full-duty work 30% faster.
Wellness, Don’t Be Afraid. Lastly, some employers are apprehensive about implementing wellness programs because they’re concerned that participation itself may cause injuries. However, the risk of such is far outweighed by the many benefits of a wellness program, including claim-related benefits like healing faster and being able to resume work sooner. Remember, the success of any program comes from it being accepted from the top down.
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If you’re using “contingent workers” — on a part-time, temporary, or contract basis — be aware that these employees face a greater risk of occupational injuries and illness. According to the National Institute for Occupational Safety & Health (NIOSH) reasons for this higher vulnerability include the tendency to outsource more hazardous jobs, lack of experience and familiarity with operations in a dangerous workplace, inadequate protective equipment, and limited access to such preventive measures as medical screening programs. The chances are that temporary workers have a wide variety of experience levels (due to high turnover) or have had the benefit of formal safety programs.
Also, bear in mind that even though the safety of contract workers is the legal responsibility of the contractor, the OSHA General Duty Clause could be interpreted to make you responsible for protecting everyone in your workplace. To help meet this obligation, and bolster workplace safety compliance we’d recommend that you take these steps:
- Include safety requirements in the contract, even if only to state that the contractor must comply with OSHA requirements. If the contractor doesn’t follow safety rules, you can force compliance or stop work for breach of contract.
- Set the safety compliance ground rules up front, during orientation or before they start work.
- Share accountability. Although an accident caused by a contract worker might not be your legal responsibility, it’s still your problem. Don’t leave safety compliance problems for the contractor to solve alone.
- Offer assistance. Explain all hazardous conditions or processes during the initial project orientation and stress any rules and restrictions, such as hot-work permit requirements, lockout/tagout, and confined spaces situations and needs.
- Document communications with contractors. Give the contractor(s) a document or form to sign when resolving specific safety problems or for conducting inspections.
- Read the OSHA Multi-Employer Citation Policy. OSHA published an enforcement and compliance directive (CPL 02-00-124, December 10, 1999) laying out its citation policy for multi-employer worksites, which includes contractors.
Finally, don’t forget that most contingent workers will only be in your workplace for a relatively short time. This only adds to the urgency of getting them up to speed on your company’s safety policies and practices as quickly as possible.
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WATSONVILLE — A 10-year-old Watsonville boy on a scooter was seriously injured Wednesday after he was struck by a driver of a Chrysler PT Cruiser in a crosswalk on Main Street.
About 3:25 p.m., a 19-year-old Prunedale woman was driving a purple PT Cruiser north on Riverside Drive toward Main Street when she accelerated to try to make a yellow light, said Watsonville police Sgt. Brian Ridgway.
A 10-year-old boy was riding a scooter behind his family in the crosswalk, and she struck him with the car, police said. The front bumper of the car hit the boy on his right side, and the boy was forced on to the hood and then the ground, Ridgway said.
Officers were near the crash and treated the boy. He was taken by helicopter to a San Francisco Bay Area hospital where he was in critical condition Wednesday night, authorities said.
The woman, whose name has not been released, has cooperated in the police investigation and has not been arrested. Alcohol use was not a factor in the crash, police said.
“This investigation in ongoing,” said Ridgway.
Watsonville police ask anyone with information to call investigations at 831-768-3350 or leave an anonymous tip on the tipline at 831-728-3544 or by texting WATSPD to 888777.
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When it comes to Workers Compensation claims, companies are looking constantly for ways to reduce claims and reduce costs.
