Workers Compensation is one of the biggest challenges to running a successful business. The risks of injury in some jobs are staggering and fraud is a reality that must be mitigated.
As the staffing business grew, so did the workers compensation challenges, Starting with a guaranteed cost program with no oversight, the cost was not guaranteed – experience mod factors after year 1 showed how costs can increase if claims are not managed.
The next step was to enter into a loss-sensitive program. Theoretically this would allow a lower cost by returning premiums if costs were below a certain threshold. However, claims management by the provider was not good. They were not incentivized to control claims. In fact, they received a percentage fee of all losses!
The key to controlling workers compensation costs is to be an active participant in loss control and prevention. Applicant screening, safety programs, customer selection and claims management are some of the key areas where participation is required.
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