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?
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 If one of your contractor’s certs is no longer valid, then you could subject your company to the Ladder of Workers Comp Insurance.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.
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.
©J&L Risk Management Inc Copyright Notice