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Workers Compensation Loss Run Most Important Information

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Workers Compensation Loss Run Information Critical

The Workers Compensation Loss Run contains very important information. I have posted almost ten times concerning online claims access. If your company is unable to have online access to your claims, at least the loss run will contain some very pertinent information. If any insurance carrier has a claim open from even 20 years ago, your company should be provided a loss run for that claim. Having loss runs is not a privilege, but a right of the policyholder.

Man hand and cellphone important information in Workers Compensation Loss Run Information
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This may be a good time to pull out your company’s loss run and look at the numbers. As I write this, I am reviewing one for a transportation company. Their E-Mod increased from .9 to 1.6 in two years. One of the main pieces of advice that I can give to an employer is that the E-Mod cannot be fixed in one year. It usually takes 2 – 5 years. Why? The E-Mod is calculated from claims that have been open for less than four years. That is not an exact statement, but I want to keep this as straightforward as possible.

The main number to examine is the outstanding reserve, reserve, unpaid funds, etc. The outstanding reserves may be named with different terms. Regardless, it is the $ that has not yet been paid out on a Workers Comp claim. The outstanding reserves are the forecasted payouts by the adjuster for the lifetime of the file. As I have said often, even though the money has not been spent, it is charged off directly to your E-Mod, which in turn heavily affects your premium.

Clipart of unpaid debts in rope Workers Compensation Loss Run Graphic
(c) 123rf.com

The basic formula is Paid Funds + Outstanding Reserves = Total Outstanding Reserves. The total outstanding reserves are the figures that your insurance carrier reports to the NCCI or the State Rating Board. There is little that you can do about what has already been paid. There are a few specialists that we work with that can review the paid funds to see if there were very many overpayments.

The quickest way to cover the claims that may affect your company’s E-Mod is to look at claims that are five years old or less. The outstanding reserves for these claims need to be reviewed. If you look at any of these claims and the $ amount of the outstanding reserves seems too large for the injury, you may have found a way to cut your Workers’ Comp costs.

I could post well over 50 pages of what to look for in the outstanding reserves. These estimations can be complicated. I will cover outstanding reserves in your workers compensation loss run further in the next post.

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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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