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Waging a War of Cost Control
Woody Hill, vice president of loss control for the workers' comp insurer EMPLOYERS, reflects on the rising frequency of wage-and-hour claims and employment discrimination, and what it means for rates in the workers' comp sector.
By CYRIL TUOHY, managing editor of Risk & Insurance® Q: What have the rising wage-and-hour claims and employment discrimination claims taught employers in the context of safety, prevention and workers' comp?
* Management commitment * Assignment of responsibilities * Safety communications system with employees * A system for assuring employee compliance with safe work practices * Scheduled inspections or an evaluation system * Accident investigation procedures for correcting unsafe/unhealthy conditions * Safety and health training and instruction * Recordkeeping and documentation Q: What are you telling your clients with regard to rising claims and the increasing litigation involving insureds and their carriers that pay to defend them? A: The best way to control workers' compensation costs is to avoid work-related injuries altogether. If no one gets injured on the job, there are no workers' compensation claims and no workers' compensation losses. In addition to adopting an injury and illness prevention program, we are advising our clients to implement a return-to-work program; providing a modified duty position until the injured worked is released to regular duties. A return-to-work program alone can have a significant impact on the overall cost of the workers' compensation claim; however, it can be difficult for smaller employers to offer this benefit. Large employers generally have the people, resources and programs to reduce their workers' compensation losses whereas small employers have fewer staff and rarely have such programs -- but the need is the same or even greater, as there's less room for financial error. In addition, we suggest the following: * Improving safety will reduce worker accidents and injuries. * Post-injury management; managing both the medical treatment and administration of the claim. * Partner with your agent's or carrier's loss control resources to assist with risk mitigation programs. Q: Can you give me some examples of how risk has been engineered out of the workplace? A: A good example of engineering controls is ergonomics/material handling. For example, to reduce the potential of repetitive strain injuries, an employer may provide material handling aids such as a fork lift, pallet-jack or other device to limit exposure. While it is preferable to engineer out a potential exposure, it may not always be feasible due to expense. Another approach to the same example above would be to implement administrative controls around material handling exposures; in other words rotate the employee population so the exposure is limited, therefore potentially eliminating claims. Other examples include removing dust particulates and/or hazardous substances via local exhaust ventilation. Another example is workplace violence due to the exchange of cash. Engineering controls could include the use of cash vaults, which limit the amount of available cash; video camera surveillance, and ensuring an accessible view to the store front so law enforcement or other emergency responders have a clear view of the operations. Q: Can you give me examples of where there are limits to workplace risk engineering and where it simply may not be feasible for employers to reduce workplace risk? A: For most employers today, it's an economic issue rather than a feasibility issue. Given the economy, most companies are very lean and simply do not have the financial resources and/or manpower to implement engineering controls and then must rely on risk control methods, which may or may not prevent adverse exposure. For example, say a small business owner has a manufacturing process which generates a lot of dust. The best approach to control this exposure would be an engineering control such as local exhaust ventilation; however, due to expense this is not feasible. As a result, the employer would need to assess the airborne exposure and industrial hygiene sampling, implement a respiratory protection program, which includes training, respiratory protection equipment, medical surveillance, fit-testing and development of the required written respiratory protection program. Q: What are the typical -- and not so typical -- signs that an employee or manager might develop into a major risk in the workplace? A: Look for any behavioral changes which are out of character for a known individual such as making threats, signs of depression, etc. With respect to losses, look for absenteeism patterns, inconsistency with respect to the accident investigation; no witnesses, etc. In most cases of workplace violence, survivors can generally point to, or remember, a situation or event, which had they addressed sooner, would have led to a different outcome. Q: Do companies do enough to heed the workplace safety and prevention advice you give them? If not, why not? What objections do employers give you when you ask them why they are dragging their feet? A: It generally comes down to dollars and cents or available staff. Employers, and especially smaller employers, may not be aware of the health-and-safety resources available to them. Employers should look to their insurance carrier, agent or regulatory agency, such as OSHA Consultation Service, for assistance implementing and managing health and safety programs.
March 27, 2012 Copyright 2012© LRP Publications |
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