Workers Comp Audit Stress Reducer
Use It For Your Next Premium Audit

Most Expensive Component of All Workers Comp Claims


Most Expensive Component on Claims

The most expensive Workers Comp claim component seems to be premium-based.  This one surprises most people.

Vector Graphic of medical symbol Most Expensive with dollar shadow on green background under spotlight

When I ask this question at presentations, the answer is usually the medical cost of the claim, or pharmaceuticals, or even settlements.

The most expensive part of a Workers Compensation claim is….poor adjusting decisions. If the Work Comp claim adjuster makes a mistake on the file, the insured/employer ends up paying for the result of that mistake through a higher E-Mod, resulting in higher premiums.

One of the most common mistakes we see is in the area of file reserving. Check back on the blogs where I mention Worst Case Scenario. Your Workers Comp premiums are calculated from the reserves on a file, better known as the total incurred. AS I HAVE SAID NUMEROUS TIMES IN THIS BLOG, WHAT YOU HAVE PAID ON A CLAIM HAS LITTLE OR NOTHING to do with the Workers Comp premium paid. It is the total incurred that matters. Please see my prior posts on the total incurred.

Paying With Gold Credit Card Most Expensive Picture

In my years in insurance companies and TPAs, the only employees who understood what goes into paying premiums at the most basic level was the Workers Comp claim department. However, no adjuster has an exact idea of what effect a file reserve or total incurred has on an employer.

The other area where we see most of the errors and higher costs is in how expedient the employer was in reporting an accident (lag time) and how quickly the adjuster made the appropriate contacts. Within 48 hours AFTER AN ACCIDENT HAPPENS, the Workers Comp claim has already established its final cost factors. Yes, in 48 hours the claim’s direction cannot be changed. There is a prior post of mine on that subject.

Next Up – My Company is in the Assigned Risk Pool, are we paying that much extra, and if we are, how do we get out of it ASAP?

©J&L Risk Management Inc Copyright Notice



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


Get the latest workers' comp news FREE!

This field is for validation purposes and should be left unchanged.