Pre-Claim Checklist: The Work Comp Playbook For Employers

You don’t wait for a hurricane to hit to prepare your home for a storm, and all workplace dangers should be treated the same way. Just as a storm can destroy your property if you’re unprepared, unforeseen claims have the potential to devastate your business. According to the National Safety Council, in the United States, a worker is injured every seven seconds, which translates to 12,900 injured workers per day and 4.7 million each year, and OSHA cites the cost of injuries to American businesses as $170 billion.

Despite your best safety efforts, unfortunately accidents happen (hence why we call them “accidents”). But you can make them far less severe for everyone involved with a pre-claim checklist. Organizations without a pre-claim strategy will experience much higher claims costs.

The Cost of Claims

Regardless of the type of claim, an unexpected claim could cripple your organization’s finances. Here are just a few quick numbers on the cost of claims:

  • Workers’ Compensation: According to data from Stanford University Department of Civil Engineering, workers’ compensation costs are twofold. The direct cost of a fracture costs an average of $50,000, but the indirect costs (such as overtime costs, cost of hiring and training a replacement, lost productivity, replacing equipment, and more) are estimated to cost the company $55,000. Depending on the severity of the injury, the direct costs could jump to higher than $100,000.
  • Employee Lawsuits: There are a range of costs to defending against a workers’ compensation lawsuit.   The WCRI research shows that employees who fear that if they are injured they will be fired or that their supervisor will not treat them fairly are much more likely to retain an attorney.
  • Lost Time: Lag time is a killer in workers’ compensation claims. The late reporting of a claim can easily increase the cost by over 25%.  But there is another lag time that never gets measured.  Consider the delays in the return to work process because the employer doesn’t have a return to work process in place.

Developing a pre-claim strategy will have a huge impact on your organizations bottom line and will safeguard your most important asset…your employee!

The Steps to a Pre-Claim Review

Step 1

Before anything else, you need to make sure that you understand your state’s requirements regarding the claims process, as they vary by state. Two examples are direction to medial and the state’s waiting period for indemnity benefits. If you do not know your state’s requirements, we have the requirements for all fifty states as well as the District of Columbia, broken down by employee and employer facing rights and responsibilities.

You will also want to make sure that your employee postings are up-to-date, as different states have different requirements and they are updated fairly frequently. All of this information is located in our Compass Safety and Health Library for your convenience, and you can search by state. For example, if you were to search in the state of Georgia, you would search “Required Workplace Posters – Georgia”.

Step 2

The next step is to have a yearly signoff on employees’ rights and responsibilities. This will ensure that there is no miscommunication between management and employees regarding employee responsibilities. Performing this signoff regularly and having evidence of communication with employees will also be beneficial to you in the event of an employee claim, as it will show that your company has made a strong effort to educate its employees. We have all fifty states’ signoff in our library of resources for your convenience.

Step 3

Another crucial step is to enroll your supervisors in our Supervisor Training: Catalog/Work Comp/Supervisor Work Comp 101. Supervisors need to be educated on their role in the claims process, as this will help the claims process to run more smoothly and efficiently, which will also reduce claim costs.

About Compass RMS

The risk management firm Risk Management, Inc. has specialized in workers’ compensation since 1996, creating the CWCP (Certified Workers’ Compensation Professional) program in 1999 and the P4 process in 2000. We launched our Compass Risk Management platform in 2008 and recently released version 4.0. For more information about our services, give us a call at (770) 534-2042 to speak with one of our consultants.