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Risk Management Mistakes – Silent Top Five In Workers Comp


Silent Risk Management Mistakes Stay Under The Radar

These five silent Risk Management mistakes in Workers Comp never show up on a graph, chart, or in a report.    After all the RIMS buzz this week, I decided to cover the mistakes I have seen in my 27 years in the insurance business from a Risk Management standpoint.

picture risk management mistakes under the radar dish
Wikimedia Commons – same or compatible license

These mistakes are from live files and projects I have reviewed or worked on in the last few years.

  1. A cheaper deal will usually cost more in the long run.  This is especially true in the vendor choice area.   A vendor that performs a job at 40% less may cost more on the claims in the long run.   One can still see the lowest bidder win a large project they should have never attempted whatsoever
  2. Having adjusters check with the Risk Manager on everything means 80% obtaining permission, and 20% of the time working on the file.   I call this situation the “Permission Death Spiral.”  Let the experts be the experts and do their job.  Set reasonable authority levels for contact.  You will sleep better at night.
  3. Bundled services are on their way out.  Unbundling services creates nightmares at first.  In the long run, your organization saves working capital or budget. This suggestion causes many debates between myself and risk managers
  4. Ignore the Six Keys To Saving on Workers Comp Costs and prepare to get out the proverbial checkbook.   I wrote those keys over the last 27 years.  They have not changed in that time.   I added the last two recently.
  5. Man Risk Management Mistakes With Heads In Hands At Desk
    (c) stockunlimited

    Risk Management mistakes do happen.  I have made and seen other Risk Managers make mistakes – even major ones.   All the predictive modeling and number wizardry never results in a 100% perfect choice.   Accept that you have made a mistake and move on.    A few Risk Managers have harmed their careers trying to prove an unprovable point.

  6. Bonus – For Self Insured Risk Managers– not knowing your LDF (Loss Development Factor) or Egads! – not having one prepared or at least a SynthMod.   How can your Risk Management program go anywhere without knowing where you are now?

This list should not be considered comprehensive.   These six are recent trends in Workers Comp Risk Management mistakes.

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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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