Insurance for Newbies

Transcription

1 Insurance for Newbies Presented by: Kathy Johnson CSRM, WCS Risk Management Strategies LLC Table of Contents Insurance Agents and Carriers Workers Compensation Liability Property Crime Education & Resources 1

2 Insurance Agents and Carriers Limited Number of Carriers in WI Not all Equal in Coverage, Services Offered, and Cost Claim Payment Philosophies may Differ Local Politics may Limit the Best Choice. Educate your Board! Workers Compensation Claims Timelines Very Important # Days for Employee to Report Injury # Days for you to Report to Carrier # Days of Waiting Period before Employee Gets Paid for Time Off Work # Days you have to Return Employee to Work to Save Money # Days Carrier has to Pay Employee for Time off Work Etc. 2

3 Workers Compensation Premium 3 Factors in Premium Calculation- Set by WI: Rate for Employee Class Code (8868, 9101, 7380 and maybe 9428) Experience Modification Factor (Rolling 3-year Claims Experience Modifier) Payrolls by Class Code Workers Compensation Dividend$ Dividend$ Paid by Carrier-Usually Approved by Insurance Bd. of Directors (Small Districts may get $0) Carriers Review Loss Ratio (Premium Versus Claims Paid) to Pay Dividend Lower Loss Ratio=Better Dividend (Usually) Variations: Flat, Sliding Scale or Combination Flat is Less Risky; Combination is Ideal 3

4 Workers Compensation Basics The Basics of Coverage & Benefits Not Black & White Determination Coverage & Service Course & Scope of Employment Date of Injury is Crucial Types of Benefits Workers Compensation Benefits All Decisions Based on Medical Opinion Medical Payments (Med Pay) Temporary Total Disability (TTD) Temporary Partial Disability (TPD) Permanent Partial Disability (PPD) Permanent Total Disability (PTD) Death Benefits 4

5 Benefits, in Detail--Generally Med Pay: Medical Treatment, Appliances & Supplies TTD: Tax Free and 2/3 of Gross 52-Week Average Weekly Wage (AWW) TPD: Temporary Partial Payment from Carrier for Earning Less than AWW Workers Compensation Benefits PPD: Payment for Permanent Impairment from Injury PTD: Lifetime Payments when Employee can no Longer Work due to Injury Death Benefits: Burial Expenses, Partial Income Replacement to Dependents & Carrier Payment to WI 5

6 Money Saving Tips Establish Culture of Safety & Early Return to Work within Restrictions. Coordinate with Doctor Maintain Close Contact with Employee and Require Check-ins After Medical Appointments; Keep Adjuster Informed Accident Investigation may Uncover Surprises. Keep your ear to the Ground Money Saving Tips Carriers set up reserves to pay claims. Accident Details/Insight you Provide is Crucial for Accurate Reserving Require Reporting of Injuries within 24 Hours. Either Signed Accident Report (NOT State Form)or Call to Triage Reporting Service Provided by Carrier/Agent Let Carrier Know you Accommodate Restrictions for Early Return to Work. TTD reserve reflective 6

7 Money Saving Tips Reserves Set Aside & Paid Out (Total Incurred) = Experience Modification Factor Elements. Control through Early Return to Work Carrier Files Claim Stats to WI 6 months before renewal. Recommend you Review all Open Claims with Adjuster for Reductions in Reserves and File Closures before 6 Month Stats Filings Claim can be Reopened for 12 Years after Date of Last Indemnity Payment. Be Aware of New Injuries Money Saving Tips Employee can File for Hearing after Claim Denial, so Carrier File Remains Open for Approx. 90 Days. Keep Adjuster Apprised of Employee Intentions to Close File at Earliest Opportunity Early Return to Work within Accommodations (Written Program Important, for Consistency and Given WFEA Rulings) Safety Committee Confidentially Discuss Near Misses, Injuries and Prevention 7

8 Recommendation Recommendation: WASBO Offers The National Alliance Workers Compensation Specialist Certification in December. How Can You Save More Money? Discontinue Continuing Salaries While Disabled from Work Injury. It reduces motivation to RTW Disallow Using Sick Time in Lieu of Collecting Carrier s TTD Payments Consider ALL Positions with Lighter Tasks, not Just Jobs within Employee s Department or Shift Make Restricted Duty Offer in Writing with Details 8

9 How Can You Save More Money? Report Claims within 48 Hours. Late Reports Cost Money: Claims reported > 3 days after injury can add 16% to medical and 38% to indemnity costs Claims reported >12 days after injury can increase attorney involvement by 67% for medical claims and 69% for indemnity claims Liability General (GL) and Auto Liability (AL) Covers District s Negligence for Bodily Injury and Property Damage Policies are Occurrence policies Medical Payments Pays Medical Expenses Regardless of District s Negligence 9

10 Liability WI Statutory Caps on Limits Collectible Per Cause of Action $50,000 per claim for GL $250,000 per claim for AL Do you do your own bussing? Liability exposure is more, even with caps Surrounding States Don t Have Caps Saving Money on Liability Claims When claim is reported, LISTEN. Don t justify or argue. Report to carrier stay out of the middle Advise employees to only talk to your carrier and get permission for any other interviews from Administration What is Said Can and WILL be Used Against you School Board Legal Liability (SBLL/E&O) 10

11 Saving Money on Liability Claims SBLL Includes Personal Injury, Special Education, Professional Error or Omission, and Sometimes, Employment-Type Claims Errors or Omissions: Failure to Use Due Care and Degree of Skill Expected of a Professional in That Profession No Caps ; Federal Awards Policies not usually Occurrence;Often Claims-Made School Board Legal Liability Business office should be notified immediately Notify Carrier Immediately No one assigns issues to attorney without business office/carrier permission No Private Conversations with Parents/Representatives of Student 11

12 Property Insures What You Own, Lease, or Have Care/Custody/Control of by Written Agreement Currently in Flux. LGPIF Seems to be Eliminated. Retail Market is Very Different Is There a Difference Between Policies? Yes! ISO Property Policies vs Manuscripted. Be Sure Exposures are Covered (Flood, Surface Water Runoff, Extra Expense for Temporary Re-Location, etc.) Inland Marine Contractors Equipment: Your Equipment not the Equipment of Contractors who Work for You E.g., Snow Removal, Lawn Equipment, Sweepers, Bobcats, Tractors, Self-Propelled ATVs, Forklifts, etc. Special Portable Property: E.g.,Musical Instruments, A/V Equip., Uniforms, Scientific Equipment, Costumes, etc. Fine Arts: Paintings, Collections, Sculptures, Historical Pieces, Rare Books, Antiques, Photos, etc. 12

13 Crime Employee Dishonesty: Employee Theft Computer Fraud: Unauthorized Access to Steal, Damage, Plant a Virus, etc. Funds Transfer Fraud: Unauthorized Transfer of Money Scheduled. Set up Procedures with Bank What are your checks and balances? Crime Depositors Forgery/Forgery & Alteration Forging Signatures or Altering Checks Monies & Securities Burglary/theft on premises Robbery off premises of cash, checks, money orders. 13

14 Education & Resources WASBO Conferences, Certified School Risk Manager Designation, and Workers Compensation Specialist Certification Wisconsin School Safety Coordinators Association Wisconsin Workers Compensation Act Available from State of WI Publications WI School Risk Management Cooperatives Thank you for your Time and Attention. 14

15 Insurance for Newbies Quick Reference Presented by Kathy Johnson, CSRM, WCS Risk Management Strategies LLC Definitions are sometimes laymanized for ease in understanding. Workers Compensation pays benefits for employees injured in COURSE and SCOPE of employment 1. Temporary Total Disability (TTD Do you continue salary while employee is off work? Do you allow employee to take sick leave? 2. Permanent Partial Disability (PPD): permanent impairment, sometimes according to schedule 3. Medical Payments - All claim decisions are based on medical opinion. Do not assign for Independent Medical Exam without carrier s permission when a claim involved; generally, the State only allows one IME and the carrier is in best position to choose the doctor and request a report so that it supports you. Important to Note: Carriers set up reserves of how much they anticipate the claim will end up costing. What information you provide is crucial. Does your carrier know you accommodate restrictions to return an employee to early work? If so, their reserve for TTD should reflect it; inform the adjuster. If a claim is denied, employee can file for a hearing, so carriers leave claim open for approximately 90 days, pending employee s litigation. A claim can be reopened for 12 years from date of last Indemnity payment. Claim reserves go into calculating your Experience Modification Factor. If your policy renews 7/1, your carrier files statistics to the State in January to report open and closed claim costs. Review all open claims with adjuster in December for reductions in reserves and file closures. How is premium calculated? The State dictates calculation and carriers give dividends. What is Experience Mod (EM) versus Loss Ratio (LR)? LR = the ratio of total incurred on claims versus premium paid. This is most important to carriers. EM determines premium you pay and reflects losses, but not how much the carrier paid in claims versus collected in premium. Recommendation: WASBO offers Workers Compensation Specialist Course in December. How can you save money? Implement these basics: 1. Early return to work within accommodations (written program important for consistency) 2. Safety Committee discusses injuries and prevention 3. Signed employee accident form or Triage Nursing Service for claims reporting 4. Accident investigation as soon as possible

16 5. Report claims to carrier within hours Claim reported > 3 days after injury can add: 16% to medical costs and 38% to indemnity costs Claim reported >12 days after injury can increase attorney involvement by 67% for medical claims and 69% for indemnity claims Liability Coverages: covers district s negligence for bodily injury and property whether by General, Auto, or Errors & Omissions (SBLL) Liability. General Liability covers exposures that are not auto and not School Board Legal (such as slip and fall incidents which are most common). Coverage varies by carrier. Auto Liability covers anyone driving your owned or leased autos with your permission. Your insurance is primary when they re driving their own vehicle on behalf of the district business. DPI regulations and Risk Management Best Practices dictate rules and limitations for who drives. Always check driving records; District-provided vehicles where District has control is always best for transporting; hiring a transportation service is second best; employee-owned/leased vehicle is third best (you have checked out for driving record and background check if any possibility of being alone with students). Any questions about suitable driving record/background check, check with your agent/carrier or consultant. Avoid parents driving other students or students driving each other. Not even a good idea to allow parent to transport own student due to District s responsibility for students at functions like sporting events, competitions, etc. SBLL coverage varies according to the carrier. Claims include errors or omissions for professional liability when there s a failure to use due care and the degree of skill expected of a professional in that profession. E.g., IEPs, Board negligence, etc. What limits are adequate? What exposures are best to insure with highest limits? State enacted laws to set caps on general liability and auto liability claims (general liability $50,000 per action; auto liability $250,000 per person. Do you do your own bussing? Liability exposure is more, even with caps SBLL/E&O claims have no caps: federal law makes settlement unlimited. Saving money on Liability claims 1. When a claim is reported, just LISTEN. Don t justify or argue. Stay out of the middle. 2. School Board Legal (E&O): business office should be notified immediately and no one assigning issues to attorney without business office permission. Property Insurance insures what you own, lease, or have care/custody/control of by written agreement Is there a difference between policies? Currently in flux. ISO forms versus manuscript such as Local Government Property Insurance Fund Extra Expense: extra expenses involved in getting set up temporarily after a loss until you are back to pre-loss condition

17 Contractors Equipment: a misnomer: your equipment such as snow removal or lawn equipment, not the equipment of any contractors who work for you. Crime Insurance Employee Dishonesty: employee stealing. What are your checks and balances and how frequently? Does same person review balances that signs checks? Forgery & Alteration forging a signature or adding zeroes to a check Monies & Securities: burglary/theft on premises and robbery off premises of cash, checks, money orders. Computer Fraud: Accessing without authorization the computer system and its programs, usually to steal money, damage the network, obtain confidential information, or plant a virus. Funds Transfer Fraud: criminals set up an unauthorized transfer of funds to their account. Set up system with bank for verbal approval for established amount, using a specific code or password that cannot be hacked. Criminals can redirect phone lines and purport to be you. Risk Management Recommendation: WASBO offers the Certified School Risk Manager national designation, awarded by the National Alliance. This 5-part course taught by local instructors is very helpful for helping you to know the questions to ask, at the very least. The Workers Compensation Specialist course is a separate Certification from a one-day program. Kathy Johnson, CSRM, WCS Risk Management Strategies LLC Madison, WI kjohnson@rmstrategies.net