Dumb & Dumber – Worker’s Compensation

Category: Our Blog

How could they be so dumb? An increasing number of people who are collecting fraudulent workers compensation claims are being caught on YouTube and Facebook. How’s that? Apparently the not-so-smart perpetrators are posting videos of themselves enjoying the more active pursuits of life on social media sites. At least that’s what I heard while attending a carrier-sponsored workshop last week, and here are some examples compliments of ABC news.

Most of you know that workers compensation insurance covers the cost of medical care and rehabilitation for workers injured on the job. It also compensates them for lost wages and provides death benefits for their dependents if they are killed in work-related accidents, including terrorist attacks. The workers compensation system is the “exclusive remedy” for on-the-job injuries suffered by employees. As part of the social contract embedded in each state’s law, the employee gives up the right to sue the employer for injuries caused by the employer’s negligence and in return receives workers compensation benefits regardless of who or what caused the accident, as long as it happened in the workplace as a result of and in the course of workplace activities. Meanwhile, workers compensation systems vary from state to state.

According to A.M. Best, workers compensation premiums for 2009 dropped 14.5 percent to $12.3 billion, the lowest level in 10 years, while the combined ratio, the percentage of each premium dollar spent on claims and expenses rose 8.8 percentage points to 120 percent. The deterioration in profitability was driven by a continuous decrease in premiums as poor economic conditions reduced the number of people in the work force and intense competition for business reduced prices for coverage. At the same time, a study by the National Academy of Social Insurance (NASI) released in September 2010 shows that workers compensation payments for medical care and cash benefits that help cover lost wages increased 4.4 percent in 2008, the latest available data, to $57.6 billion. Here is an in-depth look at the state of workers compensation from the Insurance Information Institute.

In the meantime, don’t forget that for your small business owner clients you have access to one of most competitive markets out there via Travelers. You can write monoline workers compensation or include it as part of a Select Accounts package. Travelers Select Workers Compensation is currently available to member agents in all states except AK, CO, DE, HI, MA, ND, NM, NY, OH, PA, WA & WY.

Think you know all there is about Workers Compensation and Employers Liability insurance? Click here to take a classification, underwriting and rating knowledge quiz, found on the PF&M section of Virtual Risk Consultant. Answers are provided on the same page. Click here to learn more about Big “I” VRC, Powered by Rough Notes.

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