Direct & Indirect Costs for Workers Compensation

When there is a WC injury, a lot of companies only think about the direct cost of the injury, with little of no thought about the indirect costs.  In most instance, the indirect costs make up the majority of the overall claims costs.

Why is that?  I recently did a video/interview that explains why that is. 

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.

Workers Compensation as a Loss Financing Mechanism

Many companies know that when they have a workers comp loss, they will, in most cases, see an increase in their WC costs over the coming three years.  I think a lot of companies are surprised at really how much a loss, or losses, can significantly increase their costs.

Many times I meet with a client or prospect that, fortunately for them, have not had much of a workers comp claims history.  Boy are they surprised when they discover how much even one claim is going to affect their profitability through an increase in their workers comp costs.

Except for the the largest of claims, most employers will end up paying (through an increased experience mod), more than the actual cost of the claim; this is one of the hardest things to explain to a client.

Below is a video/interview I did recently explaining how workers compensation is used as a loss financing mechanism.

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.

The Majority of US Workers are Overweight or Obese

I read an interesting blog on the US obesity problem in the Wall Street Journal today.  Gallup did a poll recently that showed that only 14% of US workers are of normal weight.  A whopping 86% of US workers are either overweight or obese, and due to their chronic health problems, they cost the economy approximately $153 billion a year.

The study is thought to be conservative, because it doesn’t include part time workers.  Gallup estimates the true cost somewhere in the neighborhood of $1.1 trillion.  These statistics are frightening, and you would think more should be done to combat this national problem.  Unfortunately, it seems to be getting worse, not better.

These should be sobering statistics for Massachusetts contractors.  Just think of the lost productivity and the increase in MA workers compensation costs?

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.

 

Nail Gun Safety

Nail guns account for over 37,000 emergency room visits every year.  The severity of injuries can be quite significant, including death.  Injuries result from misuse of nail guns, ricochet, misfires and disabling safety devices, to name a few.

OSHA and the National Institutes for Occupational Safety & Health (NIOSH) have teamed up and created a new guide on nail gun safety, with the goal of helping contractors prevent nail gun injuries.

Check out the document – Nail Gun Safety – A Guide for Construction Contractors.

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.

Experience Mod Changes on the Horizon

Earlier in the year I wrote about changes being made to the workers comp experience rating formula by the NCCI.  They will be increasing the primary loss level from $5000 to $15,000 starting in 2013.  At the time, I didn’t know in what increments, but now I do.  The following changes will be made:

  1. $10,000 for the first yr.
  2. $13,500 for the second yr.
  3. $15,000 for the third yr.

There hasn’t been a change to the current formula since 1993, and they felt they needed to make the change to keep up with the increase in claim costs over that timeframe.  So, what does this mean?  For those companies with a mod over 1.0, you will more than likely see an increase in your mod.

This makes it even more important to review losses, get reserves reduced, and get people back to work quicker.

This information brought to you by Chris Sheppard of Smith Buckley & Hunt Insurance Agency, your Massachusetts contractors insurance agent and Massachusetts business insurance resource.

 

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