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November 2010

Who Is First Named Insured On The Policy?

Term Of The Day – First Named Insured The entity or person named first on the dec page of the policy. The first named insured or primary has certain rights or responsibilities that are not afforded to the other additional insureds on the policy. Some examples of these rights would

ALAE Allocated Loss Adjustment Expense Definition

Term Of The Day – ALAE ALAE is the acronym for  Allocated Loss Adjustment Expense . In Workers Compensation, there are three areas of reserves and loss payments. They are indemnity, medical, and Allocated Loss Adjustment Expenses or just expenses.   Indemnity benefits are defined very specifically.  The lines between medical and

Is A Deductible Plan Similar to Auto Insurance?

Deductible Plan – Workers Comp Term A Deductible Plan for Workers Comp comes in two basic sizes.  The insurer retains all the claims handling responsibilities regardless of the size of the plan. There are two main categories in Workers Compensation: Small deductible – the employer retains a small amount of

Are Competitive State Funds The Same As Regular Carriers?

Competitive State Funds Still Exist Across The US – Updated 2019 Facilities that are state owned and operated that directly compete with commercial carriers. The competitive state funds usually only write Workers’ Comp policies that are intrastate (inside their own borders). Not all states participate in this type of fund. 

Is A Binder Used In Workers Compensation?

Binder – Term Of The Day A binder can be used in WC, but is not recommended.  A temporary but legal agreement that provides proof of coverage until a policy can be issued. Provided by agents or carriers, binders should clearly define the terms of the policy that will be

Time Bomb for Workers Compensation Markets – Tick, Tick, Tick

Workers Comp Is A Time Bomb A time bomb may go off soon in Workers Comp.  The post title has hit the Workers Comp airwaves after the President of Liberty Mutual had made it at a recent presentation. I often do not necessarily agree with Liberty Mutual. However, in this

Subrogation – Where Did The Money Go – Can You Still Get It Back?

Where Did The Money Go – Subrogation Bleeds Work Comp Funds Where did the money go with your subrogation?  I have posted on this subject often such as in this article. Workers Comp subrogation seems to be one of those subjects that is passed over often. Self-insureds need to be

What Is Agents Errors And Omissions Insurance – Is it Necessary?

Agents Errors And Omissions Insurance Is A Necessary Coverage The agents errors and omissions insurance is very necessary in today’s marketplace.  Errors and Omissions Insurance is professional liability insurance that protects professional insurance agents from claims arising from the sale and servicing of insurance products. Agents’ E&O is a very

California And 0% Rate Increase May Not Be Answer

The 0% Rate Increase Is Not Recommended for California Once again, California’s Insurance Commissioner has rejected the 27.7% recommended  rate increase by the California’s Workers Compensation Rating Bureau (WCIRB). I had thought the request was somewhat steep. However, a 0% rate increase may not be the answer either. The Workers

Who Is An Additional Insured ?

Additional Insured-Workers Comp Term One of the most common additional insured is a subcontractor. The subcontractor may not have the proper insurance. The main contractor may choose to cover the subcontractor by an endorsement. An individual or entity that is not automatically included as an insured under the policy of

Does An Interstate Rating Cover All States?

Term Of The Day – Interstate Rating An Interstate rating cover a an experience modification factor across more than one state. These ratings are calculated by the NCCI for employers whose previous workers compensation policies have included payroll for more than one state. While most states recognize the interstate rating

When To Start Your Workers Comp Reserve Reduction Program

Workers Comp Reserve Reduction Program I was going to construct a chart on when your company’s Workers Comp reserve reduction program would need to begin overall. I think that a formula would be easier. For a quick date calculator, try this one. There are two assumptions that have to be

Loss Reserve Stability Definition

Term Of The Day – Loss Reserve Stability An actuary’s ability to project Workers Compensation loss reserve or pricing in the future is based upon numerous inputs. One of those inputs is the amount of time covered by the data. If the actuary has 10 years of data, he/she will be

File Reviews – Eliminate Possible Big December Time Waster

File Reviews – A Big December Time Waster To Avoid Most file reviews in December  are time wasters for all the involved parties. The largest number of Workers Comp policies will renew 1/1/11. Long ago, when I was an Workers Comp adjuster, I used to be guilty of causing employers

Do Monopolistic State Funds Still Exist Today In US

Term Of The Day – Monopolistic State Funds Monopolistic state funds used to be rather numerous in the United States.  The number of monopolistic carriers have dwindled due to states such as Nevada and West Virginia converting to a free market system. The law requires that companies in that state

Introducing Our CompScreen Safety Program – Much Requested Item

Introducing Our New CompScreen Safety Program Our CompScreen(c) Safety Program is added to our expanding services.  J&L Risk Management Consultants, Inc. is proud to introduce our newly developed CompScreen Safety Program (c). Because it is now more important than ever for businesses to reduce their Workers Compensation premiums, it is

Qualitative Claim Auditing

Term Of The Day – Qualitative Claim Auditing Qualitative Claim Auditing refers to a review of claim files to explore the level of claims handling adequacy. The best way to accomplish a qualitative audit is by comparing the file handling to the claims manual using a scoring sheet. A qualitative

Seasonal Risk

Term Of The Day – Seasonal Risk A seasonal risk for Workers Compensation is when the workers are hired to work only certain times of the year. Holiday department store workers are seen as a seasonal risk business as are fruit harvesters. ©J&L Risk Management Inc Copyright Notice

Third Party Administrator Adjusts Workers Comp Claims For Self Insureds

Third Party Administrator (TPA) Is Not An Insurance Carrier A firm hired to handle Workers Compensation claims by contract. Third Party Administrator (TPA) usually work for self insureds on a yearly renewable basis.  Most governmental organizations hire TPA’s usually are paid so much per incoming medical only, lost time, or reportable

Workers Comp Safety Programs – Secret Element In One Chart

Workers Comp Safety Programs – One Of The Big Justification Secrets Most workers comp safety programs have been reduced or cut back to a minimum. As the economy has tanked, companies such as yours are looking for ways to save on workers comp safety programs more than ever. I have seen many

Agent of Record

Term Of The Day – Agent of Record An Agent of Record (AOR) is an individual/legal entity having a properly executed contract with an insurance policy owner. The Agent of Record has a legal right to receiving commissions from the policy. An AOR is authorized to represent an insured party

Safety Program – No Doubt Quickest Way To Lower E-Mods

Safety Program Lowers E-Mods By Eliminating Accidents  A safety program will always be the quickest way to lower  E-Mods. Recently, the subject of E-Mod/X-Mods surfaced in a few publications and on some of the social networks that I participate on Workers Comp. There were many discussions and posts on what

Underwriter Is Very Important Position In Workers Comp

Term Of The Day – Underwriter An underwriter works under the radar most of the time. In the broadest sense, an underwriter is the person who “underwrites” his name to the conditions of the policy. In Workers Comp, an underwriter’s job is to evaluate a given risk for plausibility and

What Is A D-Ratio in Workers Compensation – How Is it Calculated?

D-Ratio Is Associated With Each Class Code  D-Ratio is also known as the discount ratio. NCCI or your State Rating Bureau uses the discount ratio to determine the portion of the losses that are expected to be primary losses ($15,000 or less). A D-Ratio can vary by the rating state

Broker Definition – Not Same As Agent

Term Of The Day – Broker A Broker and an Agent are not the same thing. An agent is an insurance company’s representative by way of agent-principal legal custom. The agent’s primary alliance is with the insurance carrier, not the insurance buyer.  A broker has no allegiance to any insurance

Certificate of Insurance

Certificate of Insurance-Workers Comp Term A Certificate of Insurance is the document provided by the insurer with evidence that the employer has Workers Comp Insurance coverage for it’s employees. The Certificate of Insurance will show the policy term and limits. It will also provide the carriers name and the insured’s

Protected Cell Captives for Workers Comp

Protected Cell Captives In my last blog post, I covered Protected Cell Captives under the Rent-A- Captive heading. I used to think this type of arrangement was complicated and expensive to administrate. I have found Protected Cell Captives to be neither complicated nor expensive when compared with paying regular Workers

Risk Avoidance

Risk Avoidance-Workers Comp Term In Workers Comp the term risk avoidance refers to one of the most obvious way to reduce risk to the economy of the business. Just as it sounds, avoid the occurrences in your daily business that have led to risk or claims that have happened in

Rent-A-Captives For Workers Compensation

Rent-A-Captives Types Rent-A-Captives are becoming more popular in Workers Comp as a method of risk transfer. Rent-A-Captives used to be viewed as hybrid arrangements that were too complicated to be considered by most employers. That landscape has changed in the current economy. Individual Accounts Rent-a-captives can benefit individual corporate accounts

Adjudication Is Day In Court

Adjudication – Workers Comp Determination The Workers Comp term Adjudication is the process in which a judge examines the evidence, arguments and legal argument brought by two opposing parties. After examination, a decision can be made to the determine the rights and obligations between the parties involved. There are three

Captive Insurance Arrangements For Workers Compensation -Still Viable?

Captive Insurance Arrangements I have not posted on captive insurance arrangements for many months. The last time I posted was when the IRS surprised me by basically leaving captives in place. I had thought the IRS would not let captives keep their tax-free status overall. In this tough economy, companies

Indemnity Benefits Have Many Options To Replace Wages

Term Of The Day – Indemnity Benefits The term refers to the amount paid out due to a loss or damage. In Workers Comp, Indemnity Benefits pay an employee for lost wages due to an on the job injury or illness. It covers anything that prevents a worker from returning to

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