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Will There Be Spike In Workers Comp Claims Due to Sandy?

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Spike In Workers Comp Claims Post Natural Disaster

Hurricane Sandy could cause a spike in Workers Comp claims?   New York, New Jersey, and many other states have felt the impact of Superstorm Sandy.  The hidden increase in economic costs will occur when the rebuilding begins.  I had coined the term “Hurricane Syndrome” after I saw a spike in the South Carolina Workers Comp claims I was handling after Hurricane Hugo.

Graphic of Spike In Workers Comp Claims Hurricane Sandy
(c) 123rf.com

I posted on the Learning Curve as being a bellwether for Workers Comp claim spikes when a worker uses a tool or performs some job duty for the first time.  This can also be applied to the reconstruction of the northeastern states after Hurricane Sandy.

The Learning Curve will apply to reconstruction after a large storm as many labor-type workers will be doing jobs they may have never performed or have not done for a long time due to the economy.

There should be some type of claims spike over the next six months in at least New York and New Jersey at a minimum.  Accidents that would not occur in a normal situation may actually happen when a massive labor force increase occurs in a specific area.

Fallen Tree Spike In Workers Comp Claims Typhoon Damage
Wikipedia – Joe D

As noted often in this blog,  numerous accidents over a given period is much more damaging to the E-Mod (X-Mod in CA) than one or two major accidents.  The Loss Development Factor (LDF) may also spike for self-insureds.  The rating bureaus have all taken into account that numerous smaller accidents cost more over the long term than one large accident.  The  statistics of risk usually prove the rating bureaus’  assertions correct.

The Learning Curve has been around since the 1930’s.  There has not been one study that contradicted the premise of  less experience = more accidents.  If one looks at almost any college-level book that covers business analysis, the Learning Curve will be in it.

My next post will cover how carriers/TPA’s/and employers can gear up for the increase in WC claims.

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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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