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Ignoring Workers Compensation Insurance Now = Paying More Later


Ignoring Workers Compensation Insurance Means Future Larger Premiums

Many articles have appeared on this website after watching a process repeated multiple times.  An employer ignoring workers compensation insurance will soon pay more premiums to their carrier.  A self-insured employer will end up allocating more of their budget to Workers Comp payments.

picture ignoring workers comp insurance 100000 bill
(c) United States Treasury

Agents and risk managers ignoring their clients’ workers compensation insurance almost always results in having to explain a sharp increase in workers comp premiums.   Let us look at why workers comp remains “back-burner” insurance.

BTW – The above $100,000 bill is very real.  It was printed after the 1929 Depression.

Commercials Are Ignoring Workers Compensation Insurance

One can look to commercials on TV and radio over the last 10 years to see that workers comp is an ignored line of insurance until the premium audit bill arrives in the mail or an email.

I am not counting much of social media including YouTube(c) video advertisements.  I am referring to the very expensive spots on sporting and other major events.   A 30-second ad for the 2020 Super Bowl was $5.6 million. 

Over the years, GEICO (c) and Progressive (c) have increased their presence in all forms of media.  Other carriers such as State Farm (c) and Liberty Mutual possessed large advertising budgets.

How many of those commercials ended up ignoring workers compensation insurance totally?   I wrote an article on a carrier mentioning workers comp, but the one-sentence description of Workers Comp insurance was totally inaccurate. I will let the carrier that made the comment stay anonymous.

If anyone knows of a carrier mentioning Workers Comp in a commercial, please add a comment below.  Thanks.

Examples of Insured Not Ignoring Workers Compensation Insurance Cost

Two recent occurrences made me write this article.  One employer and an insurance agency decided to hire me to assess their current Workers Comp insurance situation.   Let us look at how those worked out for the employer in both cases.

Employer Assignment Showed Savings

An employer had recently hired a person with no workers comp background to try to lower their Experience Modification Factor (Mod).

They had to learn their Workers Comp system the hard way – by researching and asking questions.

Their Mods for the last three years were:

  • 2020 – 1.09 (Not terrible – needed improvement)
  • 2021 – .98 (Nice improvement)
  • 2022 – .83 (26% lower Mod than two years previous)
  • Forecasted 2023 –.80 (even lower – wow!)

I was brought in to forecast the 2023 Mod.  A person with no workers comp experience reduced their Mod significantly.   The key here was in 2019 they started paying attention to their Workers Comp Mod.

Agent Assignment Requested By Insured

I was brought in by an agency to reduce the Mod of a very large company that operates in 22+ states.   Due to three significant accidents with a company that had very low-risk classification codes, their Mod spiked to over 2.50.

I reviewed their loss runs, sent emails (not phone calls) to the adjusters asking about certain claims that were still open and the reserves on them.   It took two years, but the forecasted Mod for 2022 will very likely drop to 1.65 even with the three major claims still figuring into their Mod.

How did this happen?  The employer contacted the agent who contacted me for assistance.  The key is the employer stopped ignoring their Workers Compensation insurance.   If the insured kept ignoring their Mod and workers comp, the Mod would have likely stayed over 2.1.   That would have sustained enormous premiums for years.

How To Stop Ignoring Your Workers Comp Insurance Program

If you are reading this article, you are on your way.  Look over a loss run or a Mod sheet, call your agent to see what can be done for your Workers Comp program.  If you are self-insured, your TPA will provide stacks of info on how to pay attention to your program.

The formula is Complacency = paying more $$$.  (Plainly and Simply)


©J&L Risk Management Inc Copyright Notice


2 Responses

  1. Spot on with this write-up, I absolutely believe this site needs much more attention. I’ll probably
    be back again to read through more, thanks for the information!


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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