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Many Small Workers Comp Claims-No Major Ones

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Small Workers Comp Claims Can Be Expensive

The Other Side of the Coin – many small Workers Comp claims, but no major ones. This is one of those dangerous Workers Comp budget busters. As I said in my last post, there is a built-in safety net for a business that has one serious claim but few other claims.

Picture of Man holding a board Small Workers Comp Claims Budget
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The other side of the coin is that an employer is penalized very heavily for many small Workers Comp claims. I do not mean medical only claims, but instead lost time claims. You can have one $100,000 claim or 10 $5,000 claims. One would think the $100,000 claim would cost the employer twice as much. This is far from true.

There is a built-in factor that would reduce the $100,000 claim to a $25,000 claim. The 10 $5,000 claims would not be reduced. So a claim that looks twice as expensive as a group of claims is actually only going to cost 1/2 the premium of the group of smaller claims.

Workers Comp E-Mods are constructed to penalize an employer that has a high number of Workers Comp accidents, as the more accidents that occur, the higher the likelihood that one of the many claims could turn serious. I do not necessarily agree with the assumption, but it is the structure that is in place today for E-Mods.

Next Up – There is no such thing as a small WC claim

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt 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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