Cost of Workers' Compensation Claims on the Rise
In 2021, 23% of the U.S. workforce was older than 55, and most experts agree the aging workforce is a prominent cause of workers’ compensation increases.
The workers’ compensation sector of the commercial insurance industry is generally a stable and profitable segment. However, the claims in this market have become costlier, with concerns over severity on the
rise. While the frequency of claims has declined, several factors contribute to increasing claim expenses.
According to a survey by the National Council on Compensation Insurance, the top concerns for the workers’ compensation sector are the changing workforce and rising medical costs resulting from medical inflation, treatment innovations and hospital consolidations. Further complicating the issue, different states have varying reasons for increases. The Workers’ Compensation Research Institute found a steady rise in lost-time claims for most states, and states without fee schedules are seeing a steeper climb in these claims.
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Solutions to Consider with your Insurance Professional:
What is your broker doing to monitor claims to ensure reserves are adequate and the damages are compensable?
Do you have pre-hire physicals to ensure potential candidates can perform the required job duties?
Do you have detailed job descriptions outlining the physical requirements of each position?
Does your company offer a return-to-work light duty program?
Has your broker implement a Managed Care Network, which in many cases, allows your company to direct injured employees to vetted facilities (medical discounts may also apply)?
Do you have a drug-alcohol testing program at pre-hire, post-accident?
Do you have a driving policy, including a distracted driving provision, that outlines safety and procedural standards along with penalties for non-compliance?