Smart Business Magazine, October 2017

34 Smart Business Pittsburgh October 2017 Overcoming poor claims How to get back in your underwriters good graces Effective risk management often involves avoiding risks before they occur but accidents will happen and frequent accidents may cause the insurance company to raise your rates Perhaps a project was plagued by job site accidents and cases became difficult to manage so your workers compensation experience modification factor rating shifts unfavorably Now what Employers must consistently make safety a priority and part of the overall culture If they increase awareness and incorporate risk management risk control and claims management into each department there will be fewer employee injuries and vehicle accidents and reduced public liability This lower cost of risk will help insurance companies see your company in a more favorable light Smart Business spoke with Patrick Zedreck assistant vice president at Arthur J Gallagher Co about how to control your losses and lower your costs How far back do underwriters look when determining rates How long does it take to overcome a poor claim experience Underwriters use five years of claims history for most types of insurance It can take three to five years to overcome a poor claim experience but a business can argue that it has improved its accident prevention efforts and the past doesnt predict the future If a company has claims that drive up rates how can it lower those Any business not just companies with poor experiences should get into these habits Start by reviewing claims management and risk exposures such as safety policies work practices and procedures training and management practices that promote safety Analyze loss run claims and accident data to identify the causes driving loss trends Review covered vehicles or machinery to make sure everything is still being used If youve experienced turnover update your driver list You may be insuring a problem driver you no longer employ Make sure your employees are classified correctly so workers compensation rates are accurate Work with your agent on premium reduction and risk management strategies You can take on more risk by increasing deductibles or eliminating an exposure and implement preventive actions that eliminate or greatly reduce the possibility of a large claim happening again You also could subcontract out the types of accidents causing exposures and eliminate them from your insurance If you take this approach its critical to have appropriate risk transfer agreements with the subcontractor i e hold harmless indemnification agreements and adequate insurance requirements What training are underwriters looking for They typically want training to address the types of claims an organization is having If employees are experiencing back strains then underwriters want to implement safe lift training If vehicular accidents are too common require a defensive driving class How can a business improve its safety plan Training employees in workplace safety automobile operation property protection and employment practices liability is just the beginning Employers need to make supervisors responsible for safety with their compliance to the safety plan part of their evaluation Workplace safety committees also should be used as a vehicle for employee engagement and ownership of the risk management program If employees dont buy in to what an organization is trying to implement programs cannot succeed Identify additional sources of injury and unsafe work practices with your agent A comprehensive service plan to mitigate hazards correct unsafe behaviors and improve supervisory controls needs to remain a priority not sit on a shelf To make safety part of everyday life add activities throughout the year such as Safety and security assessments of facilities and properties Comprehensive site specific emergency response plans that are discussed regularly Table top training exercises with the staff and random site audits to benchmark safety and security readiness Workplace safety committees that promote employee involvement and ownership of risk management Any company needs to manage its risk and loss experiences but to lower your rates youll have to show that youre taking steps to lower your risk profile PATRICK ZEDRECK Assistant vice president Arthur J Gallagher Co 412 920 4123 patrick_ zedreck@ ajg com Insights Insurance Risk Management is brought to you by Arthur J Gallagher Co WEBSITE Learn more about Arthur J Gallagher Co s Pittsburgh office at www ajg com locations pennsylvania pittsburgh INSIGHTS INSURANCE RISK MANAGEMENT