How Will Current Economy Affect My Workers Compensation Premium?

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Current Economy May Spawn Hard Insurance Market

The current economy may heavily affect the workers comp insurance markets.  We have received this question very often from employers over the last three weeks. We have covered this recently. We thought it was best to cover it again.

Woman hand with Insurance icons above Current Economy Insurance Market
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The Workers Comp market is not as bad as it may seem right now. Even AIG was not failing in its insurance divisions. AIG was failing in the investments area. The market for insurance coverage is doing OK right now. I am not sure if I would even call it a hard market. When looking at the hard to soft market fluctuations of the past, the insurance market usually has about a six month lag behind the investment markets. The worst hardening of the insurance market is probably yet to come.

What I have noticed is the insurance carriers have lately been performing questionable Workers Comp audits and then bullying the employers that try to dispute any part of the audit. The hotspot for the heavy-handed audits is California. As we all know, California seems to be at the forefront for how the insurance markets operate for the most part.

Man Pointing Current Economy Paper Bill Using Pen
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We recently performed a re-audit for two different employers in California. The employers were a casino and a construction company. Even though the employers were correct to dispute the audits, the insurance carriers turned them over to their collection attorney without even considering the initial disputes.

That is when we became involved to straighten out the audit situations. The final results were a refund of $38,000 and the other one is still pending.

Could it be the case that the carriers are so overloaded with employers that are not paying their Workers Comp audit bills, that picking out the ones that have a legitimate dispute are lost in the masses? This is possible, but then again doubtful.

One of our mottoes is “Stop Just Writing Checks.(r)” If you are unsure of any communication from your insurance carrier, do not just assume that it is 100% true and correct. Asking Why is a very potent way to reduce your Workers Comp costs.

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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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