How can you reduce workers compensation costs?

1. LOSS EXPERIENCE. In the state of PA, experience modifications (calculated by the PA Compensation Rating Bureau – PCRB) are assigned to employers that generate $10,000 or more of premium for the prior three years. If overall losses were average as compared to other employers within your classification, your experience mod would be 1.00. If overall losses were higher than average, your premium would be debited. However, if your loss experience is better than the average, your premium would be credited. Keeping your losses to a minimum will reap savings in the form of a lower experience mod. If your premium doesn’t qualify you for an experience mod, PCRB will apply merit rating to your account. Merit rating is based strictly on lost time injuries. You can receive a 5% discount, no discount or a 5% debit, depending on the number of lost time injures during the experience period.

2. SAFETY PROGRAM. Providing ongoing training and requiring the use of personal protective equipment can help control losses. The PA Department of Labor & Industry also offers a 5% discount to employers that establish a formal safety committee. For more information, visit www.dli.state.pa.us.

3. POST A PHYSCIAN’S PANEL. A designated panel of providers for work-related injuries allows the physician to focus on the injured emloyee and getting them back to work as quickly as possible. The emergency room should be used only for true emergencies. The ER doctors are focused on treating a patient and moving on to the next, and associated costs are significantly more than a panel physician’s cost.

4. REPORT CLAIMS PROMPTLY. Statistics show that there is a direct correlation between the time of reporting and size of the claim. Use an accident as a learning opportunity – review the details and determine if there are corrective measures that can prevent future injuries.

5. HAVE A RETURN TO WORK PROGRAM. Developing a program to offer light-duty to employees who may have restrictions following an injury can aid in transitioning them back to full-time. Be sure to keep in touch with injured workers – let them know they’re a valuable member of your team.

Crop Seminar 2-28-12

2011 Indemnity Map

A Public-Private Partnership:  The U.S. Department of Agriculture (USDA) manages MPCI through a public-private partnership, meaning the federal government subsidizes the premiums, but private companies write all MPCI policies. There are currently 15 companies authorized by the USDA to provide MPCI coverage, and you can find that list here. The USDA requires these companies to sell MPCI policies to any eligible farmer who requests it, and the USDA Risk Management Agency (RMA) uniformly sets all the rates and determines what crops may be insured in which regions of the country.

Coverage Levels:  The RMA calculates amount of MPCI coverage based on the actual production history (APH) for each farm. APH numbers come from farmer production records from the past four, and up to the past 10, consecutive crop years. Coverage levels generally range from 50 to 75 percent of the farm’s APH, the USDA RMA grants up to 85 percent coverage for select crops in certain counties.

A MPCI policy also requires election of an indemnity price, which can be anywhere between 60 and 100 percent of the Federal Crop Insurance Corporation (FCIC) expected market price. Indemnities are paid when the grower’s yield falls below the calculated yield guarantee (APH times the insured acreage times the level of coverage times the farmer’s elected share).

Obviously, electing a higher indemnity price will result in higher indemnity payments and more expensive premiums, but in years with low yields or in the event of loss, the compensation will be much greater.

The When and the Why:  Unlike a crop-hail policy, which farmers may purchase at any time during the growing season, you must purchase an MPCI policy prior to planting. It is a continuous policy that will remain in effect for each crop year following acceptance of the original application. Farmers may change the policy on or before the sales closing date, and cancellations may only be made after the first effective crop year.

There are endless benefits to purchasing a MPCI policy, among them confidence, stability, improved financial management and comfort in knowing there is a safety net for unexpected loss and associated costs. Contact us at 717-263-4179 to learn more about your MPCI options.

If your homeowners insurance premium is escrowed through your financial instution, a name/ownership change may also affect where premium invoices should be mailed.  Making sure your your insurance provider has the correct information will avoid any late payment or potential cancellation problems.  In the event of a claim, settlement payment is often issued to the insured and any lien holder (including those on automobiles).  Again, having the appropriate information can save everyone time and aggravation. 

Not sure how your mortgagee is listed on your homeowners policy?  Need to change or remove a lien holder form your auto policy?  Call your agent for assistance.

Do you think it’s OK for a doctor to be texting, emailing or carrying on an unrelated phone conversation while performing surgery?  It may sound silly, but a driver and doctor both have the safety of others in their hands.  Distracted driving isn’t just a problem with teens; drivers of all ages are susceptible to being a danger when distracted.   

Text messaging is a useful way to communicate quickly, but safety should never be traded for convenience.  If you must make a phone call or text, pull off of the road in a safe area first.  Glancing down for just a few seconds can be a life or death situation.  Protect yourself and others — put down the phone when you’re behind the wheel.

Read more in the attached feature article from the Carlisle Sentinel:  Carlisle Young Professionals

Admitted Carriers:  An admitted carrier is one that follows guidelines set forth by the state and is therefore licensed in the state or country in which the insured exposure is located. Of course, these guidelines vary from state to state, and some are more stringent than others. The obligation to follow state regulations and submit rates to a state’s department of insurance limits the flexibility of the insurer. If an admitted carrier becomes insolvent, the state guarantee fund steps in to pay out claims and premium remuneration where applicable.

Nonadmitted Carriers:  It’s a common misconception that nonadmitted is synonymous with nonlicensed. In reality, nonadmitted carriers do not have rates filed with the state and are not as highly regulated, but this also means they are not protected by state funds. They are sometimes able to offer better rates, and these carriers can base price on specific exposures. Certain complex risks require the use of nonadmitted carriers because the conventional insurance marketplace fails to provide adequate coverage. However, in the case of insolvency, the state will not pay the carrier’s outstanding claims and premium remuneration. 

Judging Financial Strength:  Since a nonadmitted carrier doesn’t guarantee payout from the state in the case of insolvency (as an admitted carrier does), one of the most important things to consider when purchasing coverage through a nonadmitted carrier is its A.M. Best rating, which rates a carrier on financial strength and size based on policyholder reserves. As long as you are aware of market conditions and are sure the carrier is reputable, buying coverage from nonadmitted carriers can be beneficial in several ways: they often provide lower rates, absolute control over coverage terms and coverage unavailable through admitted carriers (including specialty risks, risks that are unusual or those that are unusually large). 

Choosing Prudently:  It’s important to note that nonadmitted does not mean that an insurer is not regulated – many states do regulate nonadmitted insurers. In fact, many nonadmitted carriers are actually admitted carriers in other states. Nonadmitted carriers intentionally opt out of filing rates with the state not necessarily because they are unable to comply, but because doing so provides the advantages mentioned above. On the other hand, just because a carrier is admitted doesn’t mean it is financially solvent. Because of state restrictions on rates and forms of coverage, admitted carriers’ payouts may increase faster than permitted premium increases in certain classes of business, leading to financial instability.

When making your choice of insurer, you should not only ask yourself whether the carrier is admitted or nonadmitted, but also whether it is financially capable of paying claims in the event of an accident.

Why do you need renter’s insurance?  Just because your landlord has coverage doesn’t mean that you do. In most cases, your landlord’s insurance policy covers only structural damage to the building itself. If the structure goes up in flames, your landlord’s coverage would include repairs to the building, but not reimburse you for your possessions. Renter’s insurance protects your possessions in case of a covered loss from fire, smoke, lightening, vandalism and theft. It also extends beyond on-premises theft and hazards, covering property that is stolen from your car, or is lost or damaged anywhere you happen to be.

Is coverage affordable? Because renter’s insurance covers only the value of your belongings, not the building, the premium is relatively inexpensive. For about the same cost as going to the movies once a month, you can gain peace of mind…regardless of life’s unexpected mishaps.