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Certificates of Insurance – Earn Workers Comp Savings of $500+ Per Hour

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Earn Workers Comp Savings With Certificates of Insurance

Workers Comp certificates of insurance can be a great method to earn Workers Comp savings. This was one of my old tag lines in my Workers Compensation presentation. It is easy to do and can save a company or governmental entity large amounts of cash. How can this be accomplished without too much effort?

Graphic Picture Of Coins On Soil With certificates of insurance Plant earn Concept
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Employers should require Workers Compensation Certificates of Insurance (certs) from any subcontractor that performs a job for you. If your company or governmental entity is not requiring them for all contractors, then you should read this cert horror story.

I often hear at different Workers Comp meetings that “We are doing a great job of obtaining certs. All our contractors have provided us with current certs.” The problem is – how does one know if the cert is actually valid? Remember – it is just a piece of paper.

The $500 an hour saving could actually be a conservative figure. If one of your contractor’s certs is no longer valid, then you could subject your company to the Ladder of Workers Comp Insurance. Some company’s insurance policy is going to cover the injury. The states are just not going to let an injured worker pay out-of-pocket for Workers Comp injuries.

I suggest taking out the certs and calling all the agencies that provided them or faxing over a letter that asks the agent to verify the cert. Most certs that you have received will have a phone number for the agent in the ACCORD form box 1. One of my assistants did that for one of our clients today. We found two out of 18 certs were not valid as the policies were canceled due to non-payment of premium.

You can quickly see how the $500 an hour is a conservative figure. What if one of the contractor’s employees or subcontractors had a serious injury? Please see the above Ladder of Workers Comp Insurance link.

Graphic Of Certificate Earn Workers Comp Saving
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What do you do if you find an invalid cert? Your company should immediately ask for a valid cert or be prepared to eat the claim if someone is injured that is working with that cert. I am not saying that you should immediately remove the contractor. I have often seen where the contract is renegotiated with the idea that your company will pay the premiums for the contractor.

You may want to also put the expiration date of each cert on a calendar such as Outlook and then ask for the updated cert when the policy expires. I recommend diarying the request for a new cert 21 days ahead of the expiry to make give the contractor time to provide you with a new one.

This recommendation may take some time away from other duties, but it is better than having uninsured contractors and subcontractors working for you.

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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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