Selections based on 2-4 years ago, but NOT last year: Workers Comp

Workers Comp: It's a lovely demon that every employer must carry for the employees.

The rate of insurance is based on the occupation of the employee. Example: high-rise window washer would obviously pay a higher rate than a graphics designer.

Also, the insurer takes into account your past, and calls it an "Ex-mod", or Experience Modification.

No claims, exmod goes down. Claims, exmod goes up.

Now, the immediate previous year is NOT included in the exmod calculation. But 2 years ago, 3 and 4 years ago, are included.

What can further complicate matters is lack of communication between the claims and the underwriting departments.

Lets say an employee gets hurt. The insurer puts a certain amount of money into a reserve account, and pays claims from that account.

What if there were minimal claims? The money goes back into the insurer, and the exmod is adjusted. However, sometimes, a claim doesn't get "closed" properly, and all the underwriter sees is this massive chunk of cash sitting in a reserve account. "Must be a fat claim," surmises the underwriting, and boom, there goes your exmod.

So, here's what you do....you stay COMPLETELY on top of every claim...

Or...

You have your broker do some digging when it's renewal time.

When is your WC renewing? That's your time to make "Selections."