There may be no better example of the
domino theory than a severe work-place injury claim that becomes amplified by ineffective claims management.
Severe workplace injuries can become
powerful detractors that can impact
employee morale, reduce company productivity and bottom-line profits, and even
damage public or investor relations.
“If an employee is injured on the job so
severely that he or she is not able to return
to work, other employees have to pick up
additional responsibilities,” says Connie
Harding, vice president of Hilb, Rogal and
Hobbs. “Unmanaged, this may lead to additional injury claims and soft costs, and produce a costly workers’ compensation experience modification.”
Smart Business spoke with Harding and
Christina Butz, who is HRH’s Southeast
Region vice president of claims, about
strategies for aggressive claims management and proactive loss prevention.
What is the status of Florida workers’ compensation insurance?
Harding: The workers’ compensation
market is soft. There have been solid legislative changes over the past several years
that positively impacted rates, including
legislation to lower overall claim costs.
There are loss-sensitive plans available
that can lower premiums or produce dividend returns. Cost savings from Florida’s
lucrative workers’ compensation programs
could help offset the high costs of other
lines of insurance in the state.
What errors are being made with respect to
risk management?
Harding: Most companies today have
comprehensive safety manuals and good
commitment from management. An area
for improvement lies within the claim management process. Once a claim occurs, it is
critical to share information with the
adjuster. Companies often do not appoint
somebody with authority, and with knowledge of the adjusting process and statutory
experience, to stay in contact with the
claims adjuster to share information.
Adjusters can only do their job according
to the information they have in hand.
For complex risk management accounts
that meet certain premium requirements,
risk management and insurance services
firms can implement licensed specialists
that liaise between the insured and the
claim adjusters to ensure that the adjusters
are aggressively managing claims and
keeping communication flowing between
the client and the insurance company.
What strategies should be considered for
companies with poor loss histories?
Butz: Any strong risk management program begins with top management and
should be woven into the company’s culture and policies. Risk management, including reducing the frequency of losses
and claim costs, must be a priority, much
like producing a quality product or service.
Harding: Companies with complex claims
will benefit from tapping their insurance
services firm’s expertise and programs.
These firms’ specialists first would conduct
a thorough review of the company’s claims
history for the past five years, looking for
trends on similar types of losses. Once a
trend is identified, a plan can be designed to
help eliminate these types of claims.
Second, a review of the company’s safety
manual, safety procedures and management’s commitment to safety may expose
problem areas.
A third, critical step is a review of hiring
and screening practices.
Finally, there is an assessment of the current claims management process.
What are other proactive strategies to be
considered?
Harding: A strategy that produces good
results is a safety incentive program for
employees. The program can tie a good safety record to getting an end-of-year bonus.
The financial reward helps create a buddy
system so employees are watching that
other employees use safe practices, even if
supervisors aren’t on hand to oversee.
For companies with non-English speaking employees, a bilingual staff member
should be trained to properly communicate safety issues and loss prevention policies, and to assist with the claims process.
How does risk management impact other
company functions?
Harding: A severe loss takes management and employees away from their main
responsibilities. It can also become emotional because many employees have
become friends. Additional claims can
occur as fatigued employees must pick up
additional responsibilities and may not be
paying close attention to or are not familiar
with added safety practices. This all translates into the loss of additional dollars or
‘soft costs.’ Like the domino effect, a poorly managed claim can lead to a loss of production in many areas of the organization.
Butz: A responsive workers’ compensation program provides injured employees
with prompt medical attention and assistance following an on-the-job injury that
expedites their return to work. It also demonstrates the employer’s commitment to
valued employees.
CONNIE HARDING is vice president, Hilb, Rogal & Hobbs.
Reach her at (941) 554-3113 or [email protected].
CHRISTINA BUTZ is Southest Region vice president of claims.
Reach her at (954) 714-6000 or [email protected].