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Workers Comp Budgets For Employers – Unfamiliar Territory


Post-Pandemic Workers Comp Budgets – A Few Suggestions

In a Zoom meeting with a client, the CFO had thought about the best way to set their company’s workers comp budget.  The CFO had set the budget for pre-pandemic numbers (2019) with an added percentage for increases in wages.   The client was in a large-deductible program.

From that conversation, I decided to list a few suggestions on how to adjust your Workers Comp budgets.  These suggestions are not state-specific.  Some of the suggestions will also apply to self-insureds.

In 2009 – 2011, during the beginning of the financial crisis recovery, some of the same questions were popular.

Pic gold bars workers comp budgets
(c) Creative Commons License – Stevebidmead


Workers Comp Budgets – In A New Era

Employment and wage forecasts are now super-critical.

If your company grows/recovers quickly, then be prepared for a large workers comp bill at the end of the policy year. A balancing act may be necessary.  Do not let your company experience a huge premium audit bill that is due soon without the funds available to at least enter into a payment agreement with the carrier.

Alternatives are always available.

Alternative programs such as PEOs, rent-a-captives, large-deductibles, self-insurance, and other viable options are out there if your company wishes to explore them.  Hearing that an employer has found their “one” best option always makes me ask if they explored all the options.

Always keep searching even if you have recently renewed your workers comp policy or TPA agreement.

Safety Still Rules All Workers Comp Budgets

Two large companies that were very committed to safety each have Experience Mods of .85 or lower.  Two major developments are caused by great safety programs when searching for a policy.

  • .85 or lower means more carriers are interested in covering your company
  •  15% discount built-in to your program.

Any insurance carrier, TPA, risk management, rating bureau, etc. personnel will always say that safety is key – because it is.  Some insureds decided to roll back their safety budgets during and just after the pandemic. I am reviewing their claims loss runs online due to a spate of injuries.

Many of the injuries were caused by a worker’s unfamiliarity with the job function they are now performing or a new task assignment.  The adage  – 90% of accidents happen the first time you use something new looks very familiar when reviewing the accident reports in the claims loss run/reserving review.

Resources for Assistance in Reducing Your Workers Comp Budget

Many times I am asked about where the employer can receive help in reducing their budgets.  I always list:

  • Agents, Carriers, TPAs – many have resources such as Loss Prevention and other free services
  • Industrial Commissions, State Departments of Labor, Ombudsman offices
  • Associations that your company has joined – great for finding policy sources
  • Rating Bureaus – Some have two-minute explanation videos or provide teleconferences at least monthly
  • Call me 800-813-1386.  I may not know the answer, but I can refer you to someone who can answer your questions.

Workers Comp budgets may not always be on the front burner until the premium audit bills arrive from the carrier or the TPA billing charges.



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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