I had a client recently tell me that he’d heard if the employee was found to have drugs in his system, workers’ comp would deny the claim.
Like a lot of stories in the insurance world, this isn’t black and white, and will also vary by state.
In Maryland, Injuries caused solely by intoxication or the effects of drugs not prescribed by a physician are not compensable. Now, injuries caused where the primary cause is intoxication or
the effects of drugs entitle Claimants only to medical benefits, unless the controlled dangerous substance was prescribed by a physician and the use was not excessive or abusive.
Imagine the difficulty in proving the level of intoxication, as well as the burden to show the drug intoxication was the sole cause of negligence. It can and has been done, but is difficult to prove.
Md. Lab. & Empl. Code Ann. §§ 9-506(b), 9-506(c). and Md.Lab & Empl. Code Ann. § 9-506(d).
While nearly every business owner is familiar with their “loss runs” it’s surprising how many companies aren’t reviewing their claims data on a regular basis. Loss runs are a snapshot of all your claims, open and closed, for a given period of time.
Listen to this scenario and ask yourself if this is how you operate. 60-90 days out of your insurance renewal your receptionist or office managers are fielding call after call from agents and brokers looking to quote your insurance. Maybe you “shop” every year or maybe it’s been a few years now and reluctantly you decide it’s time to bid out your insurance. The new agent comes in and before he can give you the pricing, he needs to get a hold of your loss runs. The meeting is over and your current agent or carrier reluctantly release the information, knowing very well, you’re making the request for competing agents and brokers. Maybe when you get your loss runs you notice a claim or two that surprises you, either by a larger payout than you expected or were aware of or perhaps one that’s still open that could be closed. A quick phone call to your broker and things are fixed or at least you get a good explanation of what happened to make the claim spiral the way it did.
Regardless whether you changed carriers, brokers, or otherwise, this is how many business owners only experience with their loss history.
I’m sure we can all agree there’s a better way to handle this. At the same time, what if your company isn’t large enough to have a full time risk manager or safety manager who can review the claims on regular basis. Let’s suppose the burden of reviewing the insurance and claims history is on a CFO, office manager, or owner. Take it a step further that whoever that individual is just doesn’t have time to review claims on a regular basis.
So what should you do?
- Have a policy and procedure in place to handle claims when and if they happen
- Make time to check your claims prior to your valuation date- not just when it comes time to market your insurance
These two simple steps can have an immediate and drastic impact on your market rates when you shop the insurance, as well as the price you’ll pay for years to come.
Next post we’ll review the dollar impact with some claims examples.
Marylanders with effective dates of January and February are receiving their new experience MOD’s. Have you seen a big jump or drop in your rating based on your history?
Share your results!
So far I’ve seen a mixed bag. Some mod sheets have remained unchanged, others have seen a significant increase. The biggest surprise I think for some is the retroactive date of the increased split point for all years, not just the most recent year on the MOD sheet.
What does that mean?
If the last year of data on your experience MOD was Jan. 1, 2009 to Jan 1, 2010 and you had three claims that year that were:
On your 2012 EMR, each of those claims the primary split point was set at $5,000. Under the changes, the split point for all three of those claims is now $10,000. This will have a significant impact on your EMR.
If it’s not making sense, give your agent a call. If you’re still not clear, send an email or give me a call. Good luck!