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 blog posts and heard many discussions where everyone equates safety and the E-Mod. However, there are discounts or debits that can sway your Workers Comp premiums up to 50% (+25% or -25%).
The discount or debit (egad!) can be up to 25% and is directly related into your safety program. Instead of making up a simulated schedule, I will use the state of Pennsylvania’s schedule of debits and credits. I have noticed that the Scheduled Debits and Credits are almost the same for each state.
Many Risk Managers and Safety Personnel Departments are being scaled back in this economy. Look below to see what safety and Risk Management can bring to the table, so to speak.
Safety and Risk Management may help your company’s E-Mod, but there is also a possible 50% swing in your Workers Comp budget. As they say, the proof is in the pudding. Please refer to the pudding below. I highlighted a few things in the schedule.
The loss/or expense components of insured risk’s premium may, at the option of the underwriting carrier, be adjusted in accordance with the provisions of schedule rating to reflect defined characteristics of the risk which, in the sole judgment of the underwriting carrier, are not adequately reflected in prior experience of the insured risk.
At the option of the underwriting carrier this plan may be applied to any risk regardless of premium size.
All statistical reporting requirements of the Bureau and the Pennsylvania Insurance Department, including provisions of the Statistical Plan Manual, Annual Calls for Financial Data Experience and Pennsylvania Schedule W, are applicable to business written in accordance with this plan and must be complied with by carriers using this plan.
Schedule rating credits or debits must be applied as a percentage factor to premium computed after experience modification (if the insured is eligible for experience rating) and before carrier premium discounts and expense constants if applicable.
Schedule rating adjustments for any given risk shall be based on information contained in the carrier’s files and records when the credit or debit is determined, and such supporting information must be retained in the carrier’s files and records for such risk throughout the period of time in which the policy is subject to audit under provisions of the policy.
Acceptance of a policy by an insured shall constitute agreement with the amount of schedule rating credit or debit, if applicable, or with the absence of any such credit or debit, if not applicable. Upon request of the insured a carrier shall make available documentation supporting the derivation of any proposed schedule rating credit or debit.
Upon request of the Pennsylvania Insurance Department or the Bureau a carrier shall make available documentation supporting the derivation of a schedule rating credit or debit for any specified risk or risks.
No schedule rating credit or debit may be effective prior to the underwriting insurer’s receipt of information for a risk supporting the schedule rating credit or debit in question. No schedule rating credit or debit may be changed midterm without the mutual agreement of the insured risk and the underwriting carrier.
The following risk characteristics are eligible under this plan for assignment of credits or debits subject to the maximum ranges set forth below:
|RISK CHARACTERISTIC||ALLOWABLE RANGE OF|
CREDITS OR DEBITS
|Features of workplace maintenance or operation||-10% to +10%|
|Risk elements not addressed in the Classification Plan||-10% to +10%|
|Availability of medical facilities in or near workplace||-5% to +5%|
|Safety equipment/devices present in/missing from workplace||-5% to +5%|
|Extraordinary safety programs applicable to workplace||-5% to +5%|
|Qualifications of employees||-10% to +10%|
|Accommodations/cooperation with carrier by management||-5% to +5%|
|Considerations related to policy expenses||-5% to +5%|
|Other risk characteristics not addressed above (specified)||-10% to +10%|
The maximum schedule rating credit permissible for any risk under this plan is – 25%.
The maximum schedule rating debit permissible for any risk under this plan is + 25%.
The above chart should justify most workers comp safety programs.
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