The reality of the situation is, the valuation date is 18 months after a policy’s inception and every year after. This is an important date because it’s when the insurance company sends all employee injuries, both paid and reserved to the ratings bureau, which sets the all-important experience modification. And in this case the claim was valued at $64,680 on the valuation date and was resolved some time after that. This $40,000 difference resulted in their Experience Mod being several points higher than it could have been, costing the employer thousands of dollars.

The No. 1 rule of thumb here is that if your employer client has unresolved employee injuries, you must know what’s happening. The problem is that most agents pay no attention to employee injuries, unless the employer calls with a problem. In fact, 90-120 days before the valuation date, agents should be looking at loss-run reports, to determine what is unresolved and what is still open, and more important, why?

It all comes down to your relationship with the claims adjuster, who is every bit as busy as you are, maybe more so. But that relationship should not be—nor does it have to be—adversarial. It is imperative that you update your client on all injuries and come up with a plan; every injury should have a plan. If you tear your ACL, your doctor has a plan. He’ll tell you the plan is to do the surgery, take a certain amount of time to rehab, and in 9-12 months you’ll be back in your driveway shooting hoops. But a plan can only exist if there is communication between all parties—the agent, Claims Adjuster, physician, employer and, yes, the injured worker. (Let’s not forget the poor guy who threw his shoulder out, lifting a crate off a pallet.)

It is understandable that communication between the Claims Adjuster and the doctor is going to be tough, taking into account the rigors of their respective schedules. It’s a challenge because neither gets paid to talk, they get paid to do. But that silence can sound like front row seats at a Metallica concert to your client and to the injured party.

It’s also important to communicate directly with the claims adjuster to get as much information as you can; nothing good can happen in a vacuum. Let the adjuster know that you need an update on the claim so you can keep your client in the loop. This gives you an opportunity to find out if the adjuster is missing any important information that may allow them to lower reserves or even close the claim. There is no way to understate the importance of the experience mod. In the case I mentioned regarding the cleaning company, if there had been more communication that employer may have been able to shave $40,000 off the claim, which would have reduced their experience mod from 1.23 to 1.16.

Bottom line: Injuries that can be closed out should be closed out. Keeping them on the books is nothing more than an accelerant to fuel an increase in the experience mod. And a high experience mod can imply the company has a serious defect in its workplace safety culture, and as a result you will not only be paying higher premiums but, in certain industries, get shut out on bidding on major projects.

It’s no secret that for the most part, the only reason companies buy insurance is so they can collect a check when a disaster occurs. This being the case, why does almost every agent completely abdicate responsibility for this task to a third party over which they have no control? I am not saying agents have to be claims adjusters, but they should be more involved in the interests of their client, and willing to get a little skin in the game. By doing so not only will you help keep your client’s experience mod at a satisfactory level, in some cases where insurance companies pay profit-sharing, maybe make a few hard-earned dollars.

You need to show your client that you deliver results, that you care about their business and their financial well-being, and that you are vested in making sure they have a solid, mindful workplace safety culture in place. Then, when that next agent comes around offering a lower price, he might just have a tougher time selling your client on his services because of all the goodwill you will have engendered with your client. When you turn your promises into performance and prove it to your client, price becomes secondary when they know your true value.

Kevin Ring is the Lead Workers' Compensation Analyst for the Institute of WorkComp Professionals, which trains insurance agents to help employers reduce Workers’ Compensation expenses. A licensed property and casualty insurance agent, he is the co-developer of a new Workers’ Comp software suite that will help insurance professionals in working with employers. He can be contacted at 828-274-0959 or [email protected] .