Reduce Costs With Targeted Risk Control for Workers’ Comp and General Liability
NOVEMBER 7, 2023
In today's risk landscape, the surge in insurance claims, soaring medical costs, and heightened collateral demands pose ongoing challenges for numerous organizations.
General liability (GL) claims and insurance rates have increased for the last 20 consecutive quarters, and this trend is likely to continue.1
Over the last three years, workers’ compensation claims of over $10 million have risen by 30%.2
The impact of medical inflation on workers' compensation is a top concern among employers.3
To solve these challenges, employers must implement a comprehensive risk mitigation strategy that combines claims management, risk control, and analytics into a cohesive and integrated process. Rather than treating these elements as isolated silos, organizations must engage in targeted and quantifiable risk management to ensure a path of continual improvement and enhancement. USI Insurance Services’ experience demonstrates that organizations can achieve premium reductions of up to 30% by concentrating on reducing or eliminating claims and cost drivers.
Workers' Compensation Risk Control
Adverse workers' compensation claims directly influence market access, pricing, and retained loss costs — underscoring the necessity for robust and efficient risk-control tactics. The most effective approach to altering the trajectory of claims should involve analytics, claims, and risk-control teams working seamlessly to curtail claim frequency, mitigate severity, and reduce the overall cost of risk. Specific tactics might include:
Injury Prevention. Musculoskeletal injuries are a leading cause of workers' compensation claims. A study by the Occupational Safety and Health Administration (OSHA) found that ergonomics programs can reduce these injuries by up to 60%.
New Technologies. Utilize new technologies like wearable posture sensors to identify and quantify “at-risk” postures and provide real-time hepatic feedback to the wearer as a warning and reminder to utilize proper biomechanics.
Employee Training and Safety Programs. Implementing comprehensive employee training and safety programs can significantly reduce the frequency of workplace injuries. According to the Bureau of Labor Statistics, approximately 2.8 million nonfatal workplace injuries and illnesses occurred last year. Targeted training can help reduce this number.
Early Return-to-Work Programs. Employees who return to work as soon as they are medically able have better long-term outcomes. A study by the Integrated Benefits Institute found that for every $1 invested in a return-to-work program, there's a potential savings of $3 to $10 in workers' compensation costs.
General Liability Risk Control
General liability can be a top driver of claims costs for many organizations and industries. Similar to workers’ compensation, reducing or eliminating the frequency and severity of top cost drivers for general liability can significantly lower premium or actual claims dollars. Some strategies include:
Risk Assessment and Mitigation. Analyzing historical data on general liability claims can help identify areas of high risk. Slip-and-fall accidents are one of the leading causes of general liability claims, according to the Insurance Information Institute. By proactively identifying and addressing slippery surfaces, businesses can reduce such incidents. This might include regular inspections, implementing engineering controls such as slip-resistant coatings on hard surfaces, and utilizing engineered slip-resistant surfaces in high-hazard areas.
Cybersecurity Measures. As the business landscape becomes increasingly digital, the risk of cyber-related claims has grown. The U.S. reported 1,108 data breaches last year alone, resulting in the exposure of over 300 million records.4 Targeted cybersecurity measures are essential for reducing this risk and can include encryption, hard passwords, multi-factor authentication, endpoint detection and response (EDR), 24/7 network monitoring, and other measures.
Contractual Risk Transfer. Transferring liability through contractual agreements — including insurance requirements, hold-harmless agreements, and indemnification clauses — can be an effective targeted risk-control strategy. A study by the International Risk Management Institute found that 63% of organizations have successfully used contractual risk transfer to reduce liability exposure.
New Technologies. Utilize cameras and artificial intelligence (AI) to identify, quantify and respond to hazardous situations. Real-time data collected through surveillance cameras and processed through AI and machine learning can identify and alert you to injury events and unsafe environmental conditions. This data can also be used to develop a targeted risk-control plan designed to prevent injuries.
Business Auto Issues. The top risk-control issues for business auto liability revolve around the potential for accidents, injuries, and property damage arising from the operation of company vehicles. To mitigate these risks, businesses should implement comprehensive driver training programs, conduct regular vehicle maintenance and safety inspections, and employ telematics technology to monitor driver behavior and improve fleet management. Establishing clear and enforceable policies on distracted driving, alcohol and drug use, and vehicle usage outside of work-related tasks is also crucial. Furthermore, maintaining adequate insurance coverage — including both liability and umbrella policies — and promptly reporting and addressing any accidents or claims can help protect organizations from financial losses associated with auto liability risks.
Frequent, complex and expensive claims have directly impacted the insurance marketplace in terms of premiums, coverage restrictions, and higher deductibles. This has also increased underwriter attention to loss trends. Insurance carriers will continue to favor businesses with lower loss trends and well-defined risk management programs in place.
How USI Can Help
USI does more than simply place coverage for our clients. We integrate analytics, risk control and claims management to provide clients with targeted, measurable risk management. This helps mitigate claims and premium costs, and promotes continuous improvement.
Our proprietary ClaimsLens tool aggregates client loss data from multiple sources to identify adverse loss trends and cost drivers for the client, and develops a tailored risk-control plan focused on reducing and eliminating those specific cost factors.
We leverage our experience and the success of hundreds of thousands of commercial insurance clients to develop and recommend innovative, cutting-edge solutions designed to mitigate the top sources of loss per industry.
Our cross-discipline approach integrates the expertise of our analytics, risk control, and claims teams to reduce our clients’ total cost of risk (TCOR) by as much as 30%.
To learn more about USI’s approach to risk management, contact your USI representative or email firstname.lastname@example.org.
Sources: 1Council of Insurance Agents & Brokers (CIAB) 2Safety National’s catastrophic claims data 3National Council on Compensation Insurance (NCCI) 4Statista