Car Crashes a Leading Cause of High-severity Claims

safe driving

Traffic accidents continue to be one of the leading causes of high-severity workers’ comp claims, according to research.

The National Council on Compensation Insurance found in a study that the cost of workers’ comp claims for accidents involving motor vehicles was 250% more than the average for all workplace accidents.

The study also found large differences between the cost of claims involving large trucks and passenger cars, as well as a reduction in the number of accidents during economic recessions. Besides a threat to other drivers on the road, any injuries your employees suffer while on driving for you on the job will end up being paid for by your workers’ comp policy as well any time missed from work due to the injury.

The study found:

  • While the frequency of truck fatalities is now very similar to the frequency of passenger vehicle fatalities, the frequency of non-fatal injuries is higher for passenger vehicles.
  • Motor vehicle accidents are more likely to result in multiple claims, and claims costs are higher for claims from multiple-claim events.
  • Motor vehicle accident claims are more severe than the average workers’ compensation claim.
  • Vehicle accidents affect a wide range of occupations other than just truckers.
  • Neck injuries are among the top diagnoses.
  • The duration of motor vehicle accident workers’ comp claims is more than a third longer than the average claim.
  • There is a significant amount of subrogation in workers’ comp traffic accident claims, with such claims accounting for more than half of all claims with subrogation.
  • Motor vehicle claims are three times as likely to involve a claimant attorney compared with other claims.
  • Distracted driving continues to be a leading cause of accidents and close calls.

Safe-driving rules for your staff

Encourage your employees to drive safely and abide by the safety rules you establish.

A good set of rules, drawn up by OSHA and which should be in writing for your employees, is:

  • Wear a seat belt at all times – driver and passenger(s).
  • Be well-rested before driving.
  • Avoid taking medications that make you drowsy.
  • Set a realistic goal for the number of miles that you can drive safely each day.
  • Do not use a cell phone while driving, unless you are wearing a hands-free device. Do not send text messages.
  • Avoid distractions, such as adjusting the radio or other controls, eating or drinking.
  • Continually search the roadway to be alert to situations requiring quick action.
  • Stop about every two hours for a break. Get out of the vehicle to stretch, take a walk, and get refreshed.
  • Keep your cool in traffic!
  • Be patient and courteous to other drivers.
  • Do not take other drivers’ actions personally.
  • Reduce your stress by planning your route ahead of time (bring maps and directions), allowing plenty of travel time, and avoiding crowded roadways and busy driving times.

New Experience Rating and Physical Audit Levels Set

workers' compensation, X mod, physical audit,

Starting in 2020, the threshold for California employers to be eligible for experience rating (X-Mod) has been reduced by order of the state insurance commissioner.

Commissioner Ricardo Lara in September approved the recommendations by the Workers’ Compensation Insurance Rating Bureau to lower thresholds for determining eligibility for experience rating and when a carrier needs to perform a physical audit of an employer’s payroll records.

The threshold for physical audits that takes effect for policies incepting on or after Jan. 1, 2020 will be $10,500 in annual premium, a drop from $13,000. This means that any employer with an annual workers’ comp premium of $10,500 or more will be subject to a physical audit at least once a year.

“Physical audit” is defined as an “audit of payroll, whether conducted at the policyholder’s location or at a remote site, that is based upon an auditor’s examination of the policyholder’s books of accounts and original payroll records (in either electronic or hard copy form), as necessary to determine and verify the exposure amounts by classification.”

Additionally, the threshold for experience rating or to have an X-Mod, has been reduced to $9,700 in annual premium from $10,000.

The eligibility rating threshold is the amount of payroll developed during the experience period in each classification multiplied by the expected loss rates for each class. If the total for all assigned classes is at or above the threshold, then the employer is eligible for an X-Mod.

Changes to dual-wage class codes

The insurance commissioner in September also approved the Rating Bureau’s recommendations for changes to a number of construction dual-wage class codes.

While most workers’ comp classes have one rate, in some classes the difference in claims costs between high- and lower-wage workers is so great that a dual-wage classification is needed. In those cases, the workers above the threshold rate are assigned one rate, while those below that threshold are assigned a higher rate.

This is usually because the higher-wage workers are generally more experienced and tend to suffer fewer workplace injuries compared to those below the threshold.

The new thresholds are for 14 construction classifications, and any workers above the threshold will have a lower rate applied.

CLASSIFICATIONS AFFECTED         

Masonry – 2020 threshold: $28 per hour (+$1 from 2019)
Heating/Plumbing/Refrigeration – 2020 threshold: $28 (+$2)
Automatic sprinkler installation – 2020 threshold: $29 (+$2)
Concrete/Cement work – 2020 threshold: $28 (+$3)
Carpentry – 2020 threshold: $35 (+$3)
Wallboard application – 2020 threshold: $36 (+$2)
Glaziers – 2020 threshold: $33 (+$1)
Painting/Waterproofing – 2020 threshold: $28 (+$2)
Plastering/Stucco work – 2020 threshold: $32 (+$3)
Roofing – 2020 threshold: $27 (+$2)
Steel framing – 2020 threshold: $35 (+$3)
Excavation/Grading/Land leveling – 2020 threshold: $34 (+$3)
Sewer construction – 2020 threshold: $34 (+$3)
Water/Gas main construction – 2020 threshold: $34 (+$3)