Businesses are seeing workers’ compensation rates trend upwards, with premiums becoming more expensive. Brady Ellis (pictured), chief operating officer at Whiteboard Risk & Insurance Solutions, told IB that this upward trend in rates is forcing companies to become more vigilant about how they manage their workers’ compensation programs.
According to the US Bureau of Labor Statistics, compensation costs for civilian workers increased 4.2% between March 2023 and March 2024. With premiums on the rise, Ellis emphasized the importance of focusing on controllable factors. For Ellis and his team, it’s not just about reacting to changes in the market but proactively managing the factors that influence premium rates, such as the experience modification rate and how employers can demonstrate to underwriters that they’re effectively managing their risk.
“We help employers focus on the areas that they can control around the premium,” he said. “Workers’ comp premiums come from what type of work you do (class codes) and how many people you have doing it (payroll). Then, the experience mod is a direct multiplier that will significantly increase premiums – or decrease premiums, if managed effectively.”
Rising litigation rates, especially in states like California, are another significant challenge, and Ellis advised that alternative dispute resolution (ADR) programs are emerging as a way to address this issue. For the right employers, Ellis sees ADR as a viable solution to combat rising costs associated with litigation.
“It takes litigation out of the workers’ comp process, so employers have other ways to resolve claims with their employees without having to go through the typical litigation process that increases the duration and cost of each claim,” added Ellis.
The rise of remote work and the gig economy has further complicated traditional workers’ compensation models. Ellis underscored the need for companies to update their job descriptions and ensure that carriers understand the current roles of employees.
“If their roles have changed now that they’re working from home, then their coverage might need to change too,” he said.
One of the innovative solutions that Whiteboard Risk & Insurance Solutions has implemented is the creation of a platform that dispatches a triage technician to the site of a workplace injury. This approach is designed to address injuries before they escalate into costly claims, keeping both the number and cost of claims down. This service has adapted to the new reality of remote work by ensuring that technicians can reach employees even when they’re working from home.
“It keeps close to 90% of injuries from having to become a claim at all,” Ellis said.
The company has received positive feedback from employees’ family members, grateful for the prompt and attentive care provided. For employers, this approach also translates to financial savings.
“The employees feel more cared for, which actually helps with litigation rates as well,” Ellis said. “When we’re able to handle injuries that way, the injuries typically don’t escalate to becoming a workers’ comp claim. So, employers save a lot of money on their renewal premiums as well.”
