4 Factors That Shape Your Insurance Risk Profile

Author, Drew Garcia, with Rancho Mesa Insurance Services, is the program director for NALP’s Worker’s Compensation Program. 

Ever wonder why your insurance rates high when your competitors are low? There are reasons for that including, frequency of claims, severity of claims, experience rating, average claim cost incurred, operations, trends, loss ratio etc. If you evaluate your risk profile you can take action to lower your premiums.

Here are 4 factors that help shape your risk profile.

Frequency of Claim

The number of workers’ compensation claims you average per million dollars in payroll.
Calculation = # of claims / (annual payroll/$1,000,000)
Evaluate – How often are you having workers’ compensation claims and how does that compare to other landscape companies in your region or state?  You can expect your insurance premiums to be higher if your frequency rate of claim is higher than the average.
Action – If you are having a frequency issue, you need to assess;

- Trends (back, hand, wrist, knee…)
- Cause (lifting, punctures, slips…)
- Implement corrective actions to help mitigate the risks associated with your claims.

Take it to the next level and evaluate “near misses.”  Treat a “near miss” as if it were a claim and strategize a corrective action to prevent it from happening in the future.

Lost Time Claims (Indemnity)

The number of “lost time” claims your company has per million dollars in payroll.  These are the claims in which your employee loses time away from work.
Calculation = # of lost time claims / (annual payroll/$1,000,000)
Evaluate – How often are you having workers’ compensation claims that result in lost time and how does that compare to other landscape companies in your region or state?  You can expect your insurance premiums to be higher if your Indemnity rate of claim is higher than the average.
Action – If you are having an indemnity issue, you need to assess;

– Trends (back, hand, wrist, knee…)
– Cause (lifting, punctures, slips…)
– Implement corrective actions to help mitigate the risks associated with your claims.

Establish a “return to work program” which allows your injured employees an opportunity to come back to work on limited duty.  This will help you monitor your employee’s progress and keep them feeling a part of the team.

Experience Rating

Your experience rating is a combination of your loss data and total payroll when compared to your industry typically but not always, over a three year period.  Your experience rating has the ability to credit or debit pricing accordingly based on your history.
Action – Controlling your frequency and indemnity claims will ultimately be reflected in your experience rating.

Operations

Heavier operations would include hardscape construction, tree trimming, and snow removal in which generally heavier machinery and product is used thus a higher exposure to injury. Compare these types of landscape operations to a lighter exposure such as landscape maintenance; mowing, edging and pruning.
Action – Identifying the exposures that are unique to your operations and then implementing safety programs catered to your exposures will help protect your employees.  Although your operations might consist of heavier exposures, you have the ability to implement tactics to mitigate the claims from happening and subjectively making your risk profile more appealing. Don’t wait for the injury to occur, be proactive and stop the claim before it transpires.

Your risk profile has already been created whether you know it or not.  The opportunity for you to own it and improve it is always available. To look at lowering your workers compensation insurance, take a look at NALP’s new program.

For more information, there will be a free webinar on March 22. Sign up here.

New First Aid Reporting Requirements Take Effect January 1st, 2017

Effective January 1, 2017, employers and insurers will be required to report first aid all claims, according to a recent bulletin from the Workers' Compensation Insurance Rating Bureau (WCIRB).

To learn more about the changes, visit WCRIB's Bulletin.

Court Case Endangers State Workers' Comp System

Seal of the Supreme Court of California

The Independent Insurance Agents & Brokers of California's (IIABCal) Legislative Update, a compilation of reports produced by IIABCal Lobbyist John Norwood of Norwood & Associates, recently published an update on the possible effects of a court case on the Workers' Compensation System.

Below is an excerpt from the February 6, 2017 Legislative Update article:

The California Chamber of Commerce recently filed a friend-of-the-court brief in a California Supreme Court case that will determine whether doctors who review workers' comp cases can be sued for certain medical decisions. 

The brief in King v. CompPartners, Inc argues that the appellate court incorrectly found that utilization review doctors - those who look at records to decide whether a worker's treatment was appropriate, but do not examine the patient personally - have established a physician-patient relationship and therefore owe a duty of care to the injured workers.

Major Implications
If allowed to stand, the decision will create extensive future litigation and can be expected to increase costs that will put upward pressure on malpractice premium rates for all physicians, and have a chilling effect on utilization review physicians, according to the CalChamber. 

Establishing potentially unlimited liability for utilization review physicians will potentially lead to higher premiums for employers and could drive future and existing business away from California. 

The case also will determine whether medical malpractice claims against utilization review doctors are barred, because all workers' compensation claims are under the purview of the state Division of Workers Compensation. National and statewide insurer groups joined the CalChamber on the brief. 
 

Cal/OSHA 300A Posting Begins February 1st

Cal/OSHA Form 300A

Rancho Mesa Insurance Services, Inc. would like to remind its clients that February 1, 2017 marks the start of the Cal/OSHA Form 300A posting period.  The Cal/OSHA Form 300A is a summary of the company's annual work-related injuries and illnesses.  It must be posted from February 1, 2017 to April 30, 2017.

Who is required to post the Cal/OSHA 300A Form?
Employers with at least 11 employees must post the Cal/OSHA 300A form (though, there are some exemptions for low-hazard industries).

Where must the Cal/OSHA Form 300A be posted?
The Cal/OSHA Form 300A Form must be posted in a conspicuous place within the workplace that is readily available to employees.  Employers must also send copies to employees who do not regularly visit the workplace, at least on a weekly basis, where the Cal/OSHA Form 300A form is posted.

Do I need to post the Cal/OSHA Form 300A if we have no work-related injuries or illnesses?
Yes, employers must complete and post the Cal/OSHA Form 300A form even if they have no work-related injuries or illnesses to report.

How do I complete the OSHA Form 300A?
Through Rancho Mesa's Risk Management Center, clients can generate the Cal/OSHA Form 300A using the incident tracking feature, within the system.  The form may also be printed and manually completed.

View the Cal/OSHA Form 300A.

Visit www.dir.ca.giv/dosh/etools/recordkeeping/index.html for more information.

California Workers Compensation 2017 Annual Officer Payrolls Minimums and Maximums, Assessment Rates, and Dual Wage Thresholds Announced by WCIRB

ICW Group Insurance Company, the largest group of privately held insurance companies domiciled in California, recently released an announcement that outlines the details of
California Workers Compensation 2017 Annual Officer Payrolls Minimums and Maximums, Assessment Rates, and Dual Wage Thresholds.  The document is available for your review.

For any questions concerning the changes, please contact your Rancho Mesa service team.

"2017 Annual Officer Payrolls, CA Assessemnt Rates & Duel Wage Threshold." Insurance Company of the West. 

AB 2883: Change in California Workers Compensation Law

AB 2883 Change in California Workers Compensation Law- Officer, Director, Partner, LLC Member Exclusions Effective January 1, 2017

Earlier this year, we reached out regarding California Assembly Bill 2883 (AB 2883), which drastically changed the legal requirements that allow an employer to exclude its corporate officers and the members of its board of directors from workers' compensation insurance coverage. As a result, this change will now affect ALL policies inforce as of January 1, 2017.

Below are key details to note:

• A Corporate Officer/Director must own 15% or more of the corporation’s issued and outstanding stock to be eligible to elect exclusion from WC coverage.
• A General Partner of a Partnership, or a Managing-Member of a LLC, is eligible to elect exclusion from the WC policy (Note – the 15% ownership requirement does not apply to General Partners and Managing Members).
• Grantors of Revocable Trusts are no longer deemed shareholders and are no longer eligible for exclusion.
• Each eligible Corporate Officer/Corporate Director/General Partner/Managing-Member must sign a new waiver attesting to his/her qualification to be excluded, under penalty of perjury. The new waiver(s) will replace any current Exclusion Letter.
• AB 2883 has eliminated the requirement that 100% of the stock must be held by titled Officers/Directors in order for a Corporate Officer/Director to be eligible for exclusion.

What next?

You will receive notification from your current workers compensation carrier explaining these changes. Keep in mind that in order to exclude a Corporate Officer, Member of a Board of Directors, General Partner, or Managing Member of an LLC, each individual to be excluded must sign a written waiver of workers’ compensation benefits certifying under penalty of perjury that he/she is a qualifying Officer, Director, General Partner, or Managing Member of an LLC.

Once a waiver is accepted, new waivers will only be required if there is a change in status or individual wishes to change their status.

If you have any questions please don’t hesitate to call us at (619) 937-0164.