How to Save Money on Workers’ Compensation Claims

This entry is part 2 of 7 in the series Claims Reporting

According to the National Council on Compensation Insurance, restaurants are subjected to workers’ compensation claims averaging $45,600 per year. Most restaurants can’t afford an extra bill that big. Luckily, there are ways that restaurants can avoid being crushed by these costs and also recoup losses quickly.

Prompt workers’ compensation claims reporting is key to receiving  reimbursement promptly and efficiently. The timing of when you choose to pick up the phone to report an incident to your insurance carrier has a direct effect on the bottom line. Here are the top five reasons why.

5 Reasons Prompt Claims Reporting Saves You Money

  1. Investigation collection. Prompt reporting of a workers’ compensation claim allows your insurance carrier to immediately begin investigating the claim. Investigations started timely are much more successful in collecting important evidence and obtaining information from key witnesses. This includes speaking with your employees to pin down their recollection of facts early and meeting with the injured parties to obtain their version of the accident before it is influenced by others. Another factor to consider is that plaintiff attorneys can be very well organized. If they are allowed to investigate the claim prior to an insurer’s knowledge, they will have the upper hand with early access to employees and witnesses, as well as to the scene. They can influence testimony in unfavorable ways. Preservation of the scene and key evidence is vital, especially for restaurants and taverns. These industries tend to have a higher turnover of employees. Often times, lawsuits are filed years after the initial incident occurs. By this time, it can be very difficult to locate certain employees if they no longer work for the business.

  2. Spoliation Exposure/Preservation of Evidence. Spoliation is the intentional or unintentional destruction of evidence relating to a claim or potential claim. This evidence could be physical evidence such as a broken chair or surveillance recordings that are recorded over. Late reported workers’ compensation claims increase the likelihood of key evidence being destroyed. Preservation of evidence is vital. For example, if there is surveillance video available, it should be secured. Sometimes video showing no fall occurred at the time the injured party alleges can be just as beneficial as actual video of a fall.

  3. Subrogation. Early reporting of workers’ compensation claims allows for the carrier to look at angles of subrogation. Subrogation is the right for an insurer to legally pursue a third party that may bear some negligence for the loss. If key evidence goes uncollected because your insurance carrier is unaware of a loss, it diminishes opportunities for potential recovery in these areas. Subrogation reduces the overall financial impact against the insurance carrier and the policyholder.

  4. Builds Rapport. Timely reporting of workers’ compensation claims allows the adjuster to build rapport and demonstrate empathy to the injured party. Evidence has shown that the early relationship-building that takes place on promptly reported claims results in lower overall settlements. Early reporting shows goodwill and demonstrates your concern for their well-being. Statistics show that in settlements for workers’ compensation claims reported 12 months after the date of loss, the overall settlement value is 8% higher than those reported shortly thereafter. At 24 months late, this percentage increases to 10-20%.

  5. Coverage Issues. Many states have coverage defenses for carriers on late reported workers’ compensation claims. Per the conditions of the policy, it is a requirement that if you knew or should have known of a potential claim, the claim must be reported to the insurance carrier or coverage issues could be raised.

Tips to Avoid & Reduce Workers’ Compensation Claims

Practice Safety Every Day

You and your staff have a lot on your respective plates, so it’s easy to let safety fall to the bottom of your priority lists. However, reinforcing safe practices will go a long way in helping employees stay accident-free. Work safety practices like these into your team’s regular responsibilities:

  • Diligently clean up spills and post the necessary signage indicating a wet floor
  • Salt icy sidewalks and in front of all doors
  • Require employees to wear proper footwear to prevent slips and falls
  • Train employees to properly use knives and kitchen equipment
  • Keep fire extinguishers handy incorporating safe practices into your day-to-day operations is the first step in preventing employee injuries and will help your staff stay safe and accident-free.

Engage Employees

Highly engaged employees have 70% fewer workplace accidents than unengaged employees. Make your staff feel valued by regularly asking for their feedback and/or recognizing special events — like birthdays and work anniversaries — with a card or special treat. Offer regular training and learning opportunities, so that they can continue to develop in their careers. Lastly, consider how you can improve their work-life balance through workplace policies or the benefits you offer. Your efforts will be worth it to help keep your employees committed to their work, mitigating restaurant accidents.

Report Accidents Thoroughly

If an accident does occur, promptly report it to your insurance provider. Establishing communication between the injured worker(s), insurance representative and yourself early on will help make the process smoother. It’s also important to document the scene of the accident with as many details as possible, which includes taking photos and having the people who were involved write down what happened while it’s still fresh in their memories. If a product or piece of equipment was involved in the accident, don’t alter or use it until it’s been inspected, so there’s no question of tampering. Quickly providing as much accurate information as possible will help your insurance provider process the claim more efficiently and help paint a clearer picture of what happened — potentially minimizing workers’ compensation costs.

Society has helped businesses overcome industry-specific challenges for decades and our experienced staff possesses the skills necessary to manage your losses quickly and thoroughly, saving you both time and money

Not sure what to do when an accident occurs? Learn more about Property Casualty Claims and Workers’ Compensation Claims. Or contact your local Society agent with coverage questions.

-Gina Pfalzgraf

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