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September 10, 2008 7:19 AM CDT

Understanding Workers' Comp Insurance


Masonry sat down with C. Allen Bradley, Jr., president and CEO of AMERISAFE, to find out what contractors can do to lower their worker's comp insurance rates. Following is what he had to say.

In our company's experience as a workers' compensation carrier for masonry operations, we see that falls or slips accounted for about 19 percent of the claims and 36 percent of the claims dollars. About 32 percent of the claims were lifting injuries which accounted for nearly 28 percent of the total claims dollars, and being struck by falling objects accounted for 17 percent of the claims and 24 percent of the claims dollars. Those are the big three to address from our viewpoint in your industry.

There are many ways to lower your workers compensation costs. Activity that creates a safer workplace will, ultimately, benefit you in lower costs.

Here are a few ideas:

  • Implement a safety program that targets the causes of loss in your business. Implemented safety programs are important to workers compensation carriers.You will create a favorable impression with your carrier by virtue of your commitment to a safe workplace.

  • Screen job applicants to ensure that they have experience and are physically able to perform the work required of workers. The national statistics show a lower loss experience with experienced and trained employees.

  • Insist on the use of safety equipment in the field. Proper safety equipment is a critical component of a safe workplace.

  • Implement a limited-duty program for workers who have been injured and can return to light duty. By returning these workers to productive activity, you will save money in the long run.

  • Provide safety bonuses for employees or crews that avoid loss time claims. These don't have to be elaborate, but it is critical to recognize employee commitment to safety.

  • Report all losses timely to your carrier. Remember, you don't like surprises, and neither does your carrier.

What is a "Pool Policy?"

Pool policies are more technically known as Assigned Risk policies. Since, in most every state, workers' compensation insurance is mandatory at some level of employment, the states had to create some way for a business to get insurance when no insurance carriers wanted to voluntarily write their coverage. Typically, carriers shy away from risks that are fairly new and have no track record of how safely the business is run. Or, it may be that the loss history of the business is too scary for an underwriter to be willing to offer coverage. Lastly, it may be that that type of business is just too dangerous for some carriers to write. That is not likely the case for masonry and concrete operations.

Basically, a "pool policy" is handled by some carrier or carriers at the request of the state. The manual rates are set by the state and a surcharge is added to compensate the carriers for the uncertainty of the operation's outcome.

Business owners who have assigned risk or pool policies should work to develop a solid workers' compensation history and have an agent pursue a voluntary carrier every year. Employers and employees should be diligent in their safety practices to minimize the opportunities for claims and to ensure that carriers willingly offer them coverage.

Will My Rates Go Down Every Year?

For the last couple of years the workers' compensation marketplace has softened, and carriers are competing for business by offering lower rates. This business — like many others — is cyclical. No one can predict with any certainty when the losses will force carriers' pricing to reverse and how far north they will go, but you should work with your agent months in advance of your effective date to be aware of any market changes, particularly when making your business' financial forecast or bidding contracts that may extend into your next policy period.

About the Author

C. Allen Bradley Jr. is president and CEO of AMERISAFE. For more information, call 800-897-9719.


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