Experts Address Pre-loss Control Programs

Panel Shows Benefits of Shifting Focus From Post-Injury Costs to Incident Prevention

By John M. Stahl, Esq.

An October 11, 2011, webinar entitled Injury Prevention & Pre-Loss Controls: A Paradigm Shift in Workers' Compensation, sponsored by Zurich [Insurance]” discussed how devoting time and resources to reducing compensable incidents is more sensible than focusing economy measures on post-incident workers’ compensation expenses.

The opening remarks pointed out that most employers focus efforts to reduce workers’ compensation costs on post-accident expenses, which consist primarily of reducing the medical costs of claims and programs that allow an injured employee to return to work. These comments set the stage for showing the benefits of shifting this focus to efforts to prevent compensable incidents.

The panel consisted of Rich Sarnie, Vice-President of Risk Management for Great Atlantic and Pacific Tea Company, and Clayton Shoup, Director of Workers’ Compensation Line of Business of Zurich Services Corporation.

Sarnie’s Insights

Sarnie emphasized that employers must stop thinking of compensable incidents as accidents and consider them injuries that “are 100-percent controllable, preventable, and predictable events.” He also stated the related point that “injuries are not the cost of doing business, safety is.”

Sarnie also observed that employees do not arrive at work looking to get hurt and that employers do not want them to be injured. He added that uninsured costs, such as broken equipment and lost productivity, can be between four and six times larger than insured costs.

Sarnie noted further that investigating the causes of both compensable and non-compensable incidents can provide an employer the same information and that non-compensable incidents provide that insight for free. Sarnie suggested as well that employers take simple measures such as asking in a blameless manner why employees, who do not use provided goggles and other safety equipment, are not utilizing those available measures.

Shoup’s Thoughts

Shoup primarily addressed the role that an employer’s leadership should play in reducing workers’ compensation costs through injury prevention. He emphasized that those efforts should focus on “management, policies, and administration.”

In addition to recommending that an employer’s top management demonstrate its commitment to injury prevention programs, Shoup suggested that a company have “clear safety policies and procedures” and “proper hiring procedures and [provide] an orientation on safety policies and procedures.”

Shoup shared additionally that finding the right person for the job included fully understanding the physical demands of a position and ensuring that the hired person can meet those requirements. On a related note, Shoup stressed the importance of a wellness program that includes identifying relevant pre-existing conditions and instructing every employee in how to live healthier.

Shoup further demonstrated the need to ensure that you hire the right person for the job and that you train them properly by referring to an NCCI study that showed that new employees who have worked for an employer for less than one year comprise 23-percent of the workforce but sustain 32-percent of workplace injuries.

White Paper

Advisen Ltd., which provides the insurance industry research information and other data, hosted the webinar. It also produced a free white paper that outlines Sarnie’s and Shoup’s presentations and provides additional information.

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