Primary Loss – Term Of The Day
The primary loss part of a claim is one of the most important terms involving the premiums your company pays for Workers Comp insurance.
It is the part of any loss that weighs very heavily on your E-Mod or X-Mod. In almost all cases, it is the first $5,000 of the Total Incurred, not spent, on each Workers Compensation claim. As mentioned often in this blog, Total Incurred = $ Spent + Outstanding Reserves.
Update – NCCI – the main rating bureau for Workers Comp in the US has increased the primary loss from 5,000 to 15,000 over the last few years. Some states have actually increased the figure beyond the 15,000 threshold.
I have been commenting for years that there is nothing known as a small claim. All WC claims are a straight expense to any company’s budget. Safety has now become even more important as the Excess Loss has now been reduced by 10,000.
The two areas of concern here are medical treatment and return to work. These two concepts are the simplest way to control a claim. The most expensive part of a claim is the 15,000 primary loss.
Update – California now bases the primary loss on company size. This is a totally hybrid number without any known level until the X-Mods are produced for an employer.