Records of loss experience affect the rise or drop in a company’s New York worker’s compensation insurance. The compensation experience mod plan lets employers manage expenses and implements a way to trim the cost of insurance specific to each employer. One company’s workers’ comp. loss experience is compared to the workers’ comp. loss experience of other similar companies to determine an experience mod. factor. A low rate of loss experience is graded less than 1.00 and the insurance premium is decreased. A company with a high loss experience is rated greater than 1.00 and its insurance premium is increased.

There are many ways to reduce your loss experience and better your modification experience factor as well as reducing costs.

• The experience mod is based on loss data and payroll that is reported by insurers to the rating bureau. Insufficient or incorrect data can result in an inaccurate modification factor. Make sure your data is correct by reviewing payroll and loss worksheets.
• Create a safety program or committee and establish rules. Have managers and supervisors measure performance and goals for safety and create incentives and distribute rewards for reducing injuries and reducing claims.
• Provide regular training programs to teach safety regulations and procedures and remind employees of safety often.
• Utilize your insurer’s safety and loss control programs to further reduce costs and risks.
• Enforce safety checks, self-inspection, accident investigation, and maintain equipment and machinery and clean workspaces.
• Make job requirements and specifications clear and hire appropriate employees for the job.
• Keep a drug and alcohol-free environment and implement drug testing in the hiring routine and when an accident occurs, as well as random testing.
• Look over loss runs and cooperate with the Department of Labor regarding loss control to reduce the frequency of your claims. Observe projects that often cause injury and find ways to solve the problem.
• Be aware of dissatisfied workers and have human resources deal with these employees.
• Work with a workers comp lawyer who can advise you.
• Involve your insurer in all claims to find quick and efficient ways to deal with claims.
• Your insurer may allow you to pay out of pocket for reported small medical claims to keep your experience mod factor down.
• Let your employees, managers, and supervisors know the importance of reporting any injury immediately and following procedures.
• Establish a claims management curriculum to control reserves and concentrate on effectively closing open claims. Reserves depend on the seriousness of the injury, the injury itself, and the extent of the claim. Examine loss information and correct inaccurate reserves.
• Loss data six months before the effective date of the modification factor is reviewed by rating bureaus. Examine your loss runs regularly and set meetings between your claims admin. and your claims adjuster. Have at least one meeting each year with your insurer prior to submitting your loss data.
• Participate in a division of workers conferences.
• Some states allow employers the ability to choose the medical advisor to treat injured workers. Choose the best fit doctor to your company before any injuries occur. Search for a doctor with occupational health experience who know how to handle worksite injury.
• Have your choice of physician to visit the workplace and become familiar with your business to increase the return to work rates.
• Create a referral database of specialists your primary doctor can send workers if need be.
• Uphold direct communication between the doctor and the employee. Follow all procedures the doctor recommends to the employee.
• Introduce an injury manager to keep all doctors, employees, employers, and claims adjuster up to date with information.
• Execute an appropriate return to work plan or a transitional job for the worker.
• In the case that your worker is injured by a third party, let your insurer subrogate the claim against that party to decrease your workers’ comp. claim.

Taking initiative to reduce injuries will also reduce your experience modification factor and insurance premium as well as benefit your business in other ways. To find out other ways to save your business from further risks and losses, consult Metropolitan Risk Advisory for more information.