According to BusinessInsurance.com, insurers are tightening their underwriting standards to improve profitability with workers’ compensation policies.  Employers renewing their workers compensation policies likely will pay 5% – 10% more for guarantee-cost coverage as claims costs rise and insurers’ combined ratios deteriorate.  Loss-sensitive programs may see less of an impact.

The key for business owners is to be “fully informed” decision makers with respect to the current risk management programs within their enterprise and ensuring there is a strategy in place that effectively manages the total cost of risk.  If it has not been executed recently, a thorough risk mapping review facilitated by a licensed insurance expert is sound first step.

A thorough risk mapping review should include the following, at a minimum:

• A complete risk assessment of operations, loss history, current insurance policies, and risk financing structure. 
• A review of accident prevention programs to determine if they are pragmatic, results-driven programs.
• An evaluation of the accuracy of your experience modification factor.
• A review of risk financing program analytics that support sound risk financing decisions.
• Professional oversight of claims management practices that your company has in place.

A well-guided risk mapping process can improve a company’s workers’ compensation and overall property & casualty insurance program results, and provide access to a broader insurance market.

DISCLAIMER: Because of the generality of this update, and based on particular situations, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice, financial advice and/or the advice of a licensed insurance or certified human resource professional.

© Connelly, Carlisle, Fields & Nichols 2012