I think we all would agree that there are consequences to every choice we make in life. If we choose correctly, the consequences are often beneficial and make us happy. Choose incorrectly and we suffer the consequences – for a long time…
Say you get a ticket for speeding. Regardless of the excuses you offered the traffic cop, the resulting citation has to be dealt with sooner rather than later. The choices you make while handling the speeding ticket process can have long-term effects.
The same is true when your business experiences a work-related injury. Choices made during the workers’ compensation claim process can affect business and your bottom line. The comparison between handling a speeding ticket and managing a work comp claim is eye-opening.
Paying the Fine
After you receive the speeding ticket, you usually have a reasonable period of time to take care of the fine. It’s the same with a work-related injury. Once the injury incident occurs, you have a relatively short time to get all the facts and information to your work comp carrier.
Failing to Report
Failure to pay the ticket within the time allotted often results in a warrant being issued for your arrest. While police officers don’t usually pursue traffic warrants with the same zeal as say a bank robber, the next time you get stopped for a moving violation the outstanding warrant will likely land you in jail.
Failure to report the work-related incident to your carrier timely can also bring you trouble. Carriers usually want information regarding a claim within 24 hours of the occurrence. The longer you delay, the more likely the carrier will look for reasons to fight accepting the claim. In fact, claims reported to the carrier more than 30 days after the occurrence almost always result in an investigation by the carrier to determine compensability.
A Mark on Your Record
Perhaps the most notable long-term effect of getting a speeding ticket is the rise in your auto insurance rates that will occur. Auto insurers pay particular attention to the driving records of their policyholders. Moving violations incurred by policyholders almost always result in higher premium costs. The same thing happens with businesses that report several workers’ comp claims.
In auto insurance and workers’ comp, once the insurance premium rates go up, it is a long time before they go back down. A traffic ticket can stay on your record for three to five years.
A work comp claim can affect your experience modifier for at least three years. Your experience modifier is a number that represents the ratio between the amount of premium paid to the number of losses incurred. An experience modifier higher than 1.0 means you are paying more in premium – called a debit modifier. An experience modifier less than 1.0 means you are paying less in premium – called a credit modifier. A debit modifier can put your business in a non-competitive position with your peers in the same industry. A credit modifier often gives your business an edge against the competition because your overhead is lower.
Damage to your driving record from speeding tickets can be lessened through such avenues as deferred adjudication or defensive driving classes. You still have to pay the fine, but the citation is kept off your record.
Repairing the Damage
Damage to your company experience modifier can also be lessened by actions such as aggressive claims management, improvement in your company safety program, effective safety training for your employees and most importantly – an effective “modified duty” program that returns injured workers to some form of productive work while they mend. While on modified duty, injured workers benefits from work comp are reduced by the amount they are earning while at work in most states. The less money paid out on the claim translates to a lesser impact on your experience modifier.
Insurance Will Make You Pay
Speeding tickets and work comp claims have a lot in common. Too many tickets in a short time can cause your insurance premiums to skyrocket and may make you “uninsurable” in the open market. It’s the same with work comp claims. Too many claims in too short a period WILL cause your premiums to skyrocket and could put your company at the mercy of your state’s insurance fund – the insurer of LAST RESORT.
Employers Resource works with each of our clients to promote safety in the workplace. Our claims people strive to ensure that injured workers get the best of care while we watch to make sure frivolous or fraudulent claims are identified and stopped. Give us a call today to learn more about how Employers Resource can help reduce your work comp costs and positively affect your bottom line.