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Safety And Risk Management Departments – Are They Really Worth It?


Safety And Risk Management Departments – Worth The Expense?

During workers comp premium and review audits, I have pleaded with companies to keep their risk management and safety departments as fully staffed as possible. Workers Compensation safety and risk management departments have been pared to the core during the great recession.

Picture of Safety and Risk Management Department Ways

One of the reasons is there are no tangible effects that can be easily measured. Workers Comp is a lagging system meaning that results for a great safety and/or risk management program usually show little effect for at least 18 months. The full effects will not be known for up to 54 months.

The bell is now going to toll for companies that greatly reduced or eliminated their risk management and safety programs. The NCCI has changed the rules of how Workers Comp E-Mods (Mods) are calculated for each insured.

The primary loss portion of the claims is going to increase from:

Rope Risk Management With Knot In The Middle

I pulled data from one of our clients and simulated what their E-Mod would look like under those circumstances. There are three articles on what their new E-Mod with the changes. It was not pretty. Click on each bullet point numbers to see the effects of the upcoming NCCI changes

Basically, the NCCI has sent a message to unsafe higher E-Mod employers that they are going to have a much increased E-Mod and will be paying higher Workers Comp premiums.

The easiest way to avoid being thrown into the coming E-Mod hurricane is by not having any accidents – plain and simple. The E-Mod systems are designed to not punish employers that have one bad accident. However, accident repetition is going to cause any employer to write massive premium checks in the future.

Any employer that reduced their claims or risk management staff should reconsider that tact. I do realize these are hard times. Safety and risk management departments are golden to employers for the next four years.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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