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Workers Comp Question From One of Our Blog Readers


Main Workers Comp Question At Presentations and Meetings

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A great Workers Comp Question was asked by one of our blog readers. This is a question that we are asked quite often at presentations and client meetings.

What is the difference between paid, total incurred, and reserves on our Work Comp loss runs? The way that most carriers and TPAs define the terms are as follows:

  • Paid – what was paid on the Workers Compensation file to the date of the loss run. If any large bill or payment was in a pending status, Paid does not include the bill until a check has been cut. THIS IS ONLY PART OF WHAT YOUR EMOD IS CALCULATED FROM YOUR UNIT STAT DATE.
  • Total Incurred – This is what was paid + the Work Comp reserves on the file. THIS IS WHAT YOUR EMOD IS CALCULATED FROM YOUR UNIT STAT DATE. The Total Incurred on the file includes the reserves.
  • Reserves – This is the estimated amount the Workers Comp adjuster thinks will be spent on the claim OVER AND ABOVE WHAT HAS BEEN PAID ON THE CLAIM.

Remember that Expenses are included as part of the Total Incurred figure on loss runs.

Rarely do the rating bureaus include ALAE (Allocated Adjustment Expenses) in their Experience Modification Factor calculations.

If you have not heard of some of the terms in this blog, check out https://cutcompcosts.com/ and click on the Definitions Tab.

Check out our next installment – Some misconceptions about Emods and Loss Runs

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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