As seen in this Youtube video, “in a Russian liquor warehouse, a forklift driver hits the gas in reverse and plows into a warehouse rack filled with liquor, causing a domino effect that brings down half the warehouse. There was over a hundred thousand dollars in damage. The driver survived. No report if he is still employed.”
All joking aside, an accident like this can have a vast impact on your business operations such as Property Damage with the destroyed product. Think about the extensive clean up and reorganization; the suspense of business operations/ business income/interruption exposure. Also, from a Workers Compensation and Employee Disability standpoint, there are injured employees which means lost time, recovery, employee shortage, and training costs for other employees to fill the void. This can have a devastating impact on your bottom line.
Here are some Safety Tips For Forklift Drivers:
- Each day, check that the forklift is ready for the day’s work and perform any necessary maintenance before operating.
- Report any malfunction or poor performance to your supervisor immediately.
- Use reverse when going down inclines and go forward up inclines.
- Do not travel with the load elevated, and keep the load stable and as close to the floor as possible.
- Avoid raising or lowering a load while the forklift is moving.
- Always keep the load tilted back towards the carriage while raising and lowering.
- Make sure the load is balanced and is within the capacity of the truck.
- Never use the forks as a personnel elevator unless properly equipped.
- Always make sure your driving path is clear.
- Slow down for corners, blind spots and doorways.
- Drive defensively by always being aware of your surroundings and watching for the unexpected.
- Be aware of ground conditions and always take the smoothest possible path.
- Never try to turn on an incline.
- Cross tracks diagonally and slow down for uneven surfaces.
- Keeps legs, arms, feet, hands and head inside the forklift.
- Be aware of others around the job site, in case they do not see you.
- Always give those on foot the right of way.
- Stay out from under forks and loads.
- Never show off or use the machine for anything other than your specified job tasks.
- Never give anyone a ride or allow anyone who is untrained to operate the forklift.
Finally, here’s a Sample Performance Test for Forklift Operators for reference to monitor your employee forklift drivers.
Minimize, monitor, and control the probability and/or impact of unfortunate events before they happen. That’s what Risk Management is all about.
Fall protection was once again the most-cited workplace safety violation in OSHA’s annual top 10 violations list for fiscal year 2013. The whole list is as follows:
- Fall protection: 8,241 Violations
- Hazard communication: 6,156 Violations
- Scaffolding: 5,423 Violations
- Respiratory protection: 3,879 Violations
- Electrical – wiring methods: 3,452 Violations
- Powered industrial trucks: 3,340 Violations
- Ladders: 3,311 Violations
- Lockout/ tagout: 3,254 Violations
- Electrical – general requirements: 2,745 Violations
- Machine guarding: 2,701 Violations
The list was presented at the National Safety Council Congress & Expo in early October.
Take this opportunity to review your company’s safety policies and address any areas of weakness.
Contact me or your risk manager to find out more about how you can reduce worker injuries and keep your employees safe and healthy.
Five construction workers are killed from falls each week in the U.S., according to new data from the Census of Fatal Occupational Injuries (CFOI).
Watch this new video from the California State Compensation Insurance Fund with expert instructions on proper harnessing techniques to protect workers from falls and reduce risk of injuries on construction sites. Topics include: A, B, C, D of Fall Protection, inspection of Body Harness, using the correct type of connector and de-accelerating devices.:
Do you have a Fall Protection safety program established for your business? If no, you can contact me and I can help you establish one.
For a few more pointers on Fall Protection and Safety, click here: Safety Matters Fall Protection and Safety
Workers’ compensation fraud costs the insurance industry roughly $5 billion each year, according to estimates by the National Insurance Crime Bureau. And depending on whom you ask, fraud accounts for as much as 10% of the costs of all workers’ comp claims.
With the tougher economic times, particularly as lay-offs mount, we’ve definitely seen a trend in our agency of work-related injuries for a variety of manufactured reasons, such as for an injury that occurred on personal time.
Look for these tell-tale signs of potentially fraudulent claims. Usually one of these items alone is not enough to point to fraud, but if you have two or more of these signs, it could suggest a problem.
1. Late reporting. If you have an employee who suffers a legitimate on-the-job injury, they will generally report it right away. This may not always be indicative of a fraudulent claim, though, because sometimes the true effects of an injury may not be known until the following day.
2. The Monday morning claim. If the injury allegedly occurred on Friday, usually late in the day, but did not get reported until Monday, there is reason to suspect there might be a little more going on than meets the eye. The logic is that the employee likely suffered an injury over the weekend and does not want to pay for it themselves if they lack health coverage, or if they don’t want to foot the bill even for their health coverage deductible.
3. Lack of witnesses. Often your employees won’t be working in a solitary environment and there ought to be somebody on your staff who witnessed the accident. Still, not every claim has a witness and this should not be used solely to determine fraud.
4. Sketchy details or conflicting descriptions. Most claimants can recall the details of their injury. If the claimant seems to be fuzzy on the details and gives vague responses to questions, it could be a warning sign. Also, if the employee’s description of the accident conflicts with the medical history or First Report of Injury, there may be a problem. This could arise if, upon further investigation, the employee keeps changing the story and adding or removing pertinent information – a good reason to suspect it to be a fraudulent workers’ compensation claim.
5. Disgruntled employee. A disgruntled employee is more likely to place fraudulent claims than an employee with high job satisfaction.
6. Financial hardship at home. Workers’ compensation benefits are sometimes seen as a way out of a tight financial situation at home. Although temporary disability benefits are lower than normal working wages, the worker could use the time to “double dip,” that is, take on extra work when they are supposed to be at home recovering from the alleged injury.
7. Hard to reach. This ties in with number six. If this occurs every time the claimant is called, there is a possibility of fraud.
8. Misses medical appointments. If an employee is truly injured, they want to get better and will make sure to go to all medical appointments. Missing appointments is another reason to suspect fraud.
9. Employee is engaged in activities at home that are not consistent with the injury. If your employee reported a back injury and other employees find that he is playing softball on the weekends or renovating his yard, there is a good reason to suspect fraud.
10. Employment change. The employee reports the injury right before or after being laid off, near the end of a contract job or near the end of seasonal work.
11. Post-termination claims. If an employee files a claim after being laid off or fired, red flags should pop up.
12. Frequent moves and changes. The claimant has a history of frequently changing physicians, addresses and places of employment.
13. History of claims. If the claimant has filed suspicious or litigated claims in the past, they could be a person who feeds off the system.
14. Employee refuses treatment. There should be no reason that a legitimately injured worker refuses a diagnostic procedure to confirm the nature or extent of an injury.
15. Rigorous hobby. If the injured worker has a pastime that could cause an injury similar to the alleged work injury, the claim could warrant further investigation.
Remember, if you suspect fraud, you should talk to your broker or the insurance company claims representative to alert them. All insurance companies are required to have special investigations units that look into claims fraud. It benefits both you the employer and the insurer if the insurance company investigates and uncovers a fraudulent claim.
If the insurer suspects fraud, they can reject the claim and report their suspicions to the local district attorney’s office and the Department of Insurance.
Credit: Atlas General Insurance Services
The workers compensation insurance market can be a really cruel beast. Take for example a client of ours with a pretty sizable payroll (and big premium account) whose workers compensation insurance policy is renewing this month. They hadn’t sustained a work related injury in almost ten years which is a feat in itself considering the risky work they do as seismic retrofitters of unreinforced buildings.
After almost ten years with a clean workers compensation loss history, this client experienced two unexpected employee injuries this year with over $100,000 in claims paid for injuries and disability. This $100k is only a fraction of the premium this client has paid for their workers compensation insurance over the last ten years. However, the current carrier is non-renewing their policy and most other carriers are declining to quote. Funny thing is, these same carriers were begging for a chance to write their renewal in years past. In either case, this is how the workers compensation insurance market works sometimes as harsh as it can be.
Although it’s impossible to completely eliminate employee injuries, there are steps you can take as an employer to help minimize the frequency and severity of injuries:
7 Steps To Manage Workers Compensation Costs
1. Hire responsibly. Employers should take time to find the right employees for the workplace and use tools like employment applications, reference checks, pre-hire drug screens, motor vehicle driving history and background checks.
2. Establish a safety program. Develop policies, procedures and rules. Provide employees with the necessary training, proper tools and personal protective equipment to do their job safely.
3. Enforce safety rules. It is not enough to train employees and provide them with the proper tools. Businesses should routinely remind employees to work safely through the use of workplace audits, safety meetings, toolbox talks and annual training.
4. Provide immediate medical care. Pre-arrange medical facilities for employees in the event of a workplace injury. Be prepared to provide transportation for nonemergency injuries. For emergencies, call 911. Always require a post-accident drug test to be administered.
5. Report all injuries immediately. All injuries should be reported to the insurance carrier within 24 hours of the incident. Ongoing communication with the injured employee and the claims adjuster is extremely important in order to better manage the claim.
6. Investigate all accidents and near misses. Businesses should review accidents to assess what happened and take necessary steps to make sure it does not occur again.
7. Provide transitional modified jobs. Once an employee is released to return to work, businesses should be prepared to offer alternate duty if the employee is not currently able to perform duties required by their position.
These steps don’t have to be taken alone. Talk to your broker or carrier about the resources available to help your business mitigate risk.
Workers’ Compensation insurance can get costly and is a big pain in the butt for some businesses. In fact, the costs to carry coverage can even threaten the existence of some small businesses, especially in states such as California. The good news is that the insurance market is currently “soft”, meaning lower rates than we have seen in the past five plus years. However, it’s pretty much a guarantee the pendulum is just beginning to turn and we’re going to see work comp rates creeping upwards again as healthcare costs have skyrocketed, among other things.
Workers Compensation premiums are based in part on some things which you have little or no control, such as the type of industry your business is in, or the region or state you’re located. But rates are also based on things you do have some control over, such as your claim history and payments.
Here are 10 steps you can take to help lower your Workers’ Compensation costs:
- Match the applicant carefully to the job: Base the match on the applicant’s skills and abilities. Your careful hiring practices can go a long way toward reducing your costs. The Department of Fair Employment and Housing offers brochures to help guide you in conducting job interviews. Note: Discrimination because of a handicap is unlawful.
- Make safety a priority on the job every day: A safe workplace can lower your claims costs. It is far less expensive to prevent an accident than to pay for one.
- Fix dangerous conditions: When you become aware of a hazard on the job site, take appropriate corrective measures. Your failure to do so could result in a “Serious and Willful Misconduct” suit against you. This suit carries severe penalties that you would pay, not your insurance carrier.
- Train Supervisors: Workers’ compensation law includes supervisors in the definition of “employer.” When a supervisor fails to follow the law, it counts against you. Make sure your supervisors know all that is required of employers.
- Report employee injuries: As soon as you are aware of an injury, notify your insurance carrier by completing and sending the Employer’s Report of Occupational Injury or Illness form. The report requires you to provide information that includes the nature of your business, the type of employee injury or illness, and how it occurred. Your complete statements in each of these sections are necessary for determining the appropriate benefits. For example, information about your employee’s work hours and salary is necessary for computing benefit payments.
- Provide the employee claim form: You must provide the employee with a Workers’ Compensation Claim Form within one working day of learning of an injury. The employee should return the completed form to you. When you receive the employee’s claim form, make sure you sign and date it. You must then immediately forward the original to your carrier. The first indemnity payment is due within 14 days of your knowledge of a disabling injury. Failure to provide timely benefits may result in a penalty. The penalty may cost you, the employer, if findings indicate that you did not file the claim form with your carrier on time.
- Exercise medical control: Be sure to refer all of your injured workers to your carrier’s Medical Provider Network (MPN) physician. If you do not know of a physician or medical facility, contact your agent or carrier. Be sure to post notices with the name, address, and phone number of your medical provider so your employees know where to go in case of an injury. If the employee has previously notified you in writing of his or her personal physician, the employee has the right to be seen by that physician.
- Communicate with your employees: Show them you care about their well-being. If an employee sustains an injury, stay in touch throughout the recuperation period.
- Consider a Return To Work program: A Return To Work (RTW) program can help bring your injured employee safely back to work as early as possible. You adjust the transitional job to accommodate the employee’s improving condition until he or she can return to his or her usual duties. You reduce your costs; your employee can return to a self-supporting status; everybody benefits.
- Maintain records: Your personnel files can be of great assistance to your carrier in dealing with some cases. Information about an employee’s job description, wages, previous work history, recreational activities, any current work problems, and previous injuries is essential when fighting disputed claims.
As with any type of insurance, contact your insurance agent or carrier if you have questions on your workers’ compensation coverage, or if you need help controlling your costs. Insurance carriers have just as much incentive as you to prevent and/or mitigate loss, so there are risk control options to help.
Here’s a word of advice for you: If you’re a business owner, make sure you’re accurately reporting your payroll on your workers compensation insurance policy. If you are using subcontractors/ independent contractors to perform services for your clients, you must obtain a certificate of insurance from these contractors confirming they carry their own workers compensation insurance coverage. If not, you may be liable for any losses that occur as a result of the services they are performing for your business.
Here’s a friendly reminder that it doesn’t pay to cheat the system:
California insurance commissioner, Dave Jones, announced in a press release on 2/23 the conviction of a California business owner for insurance fraud and perjury. The case involves a $1.6 Million penalty for failure to pay premiums and failure to accurately report payroll.
Ronald J. Haas Sr., 69, has been convicted on 10 counts of insurance fraud for failing to accurately report payroll and for failing to pay insurance premiums to his workers’ compensation insurance carriers. Haas was sentenced to one year in the county jail and restitution to the entities involved, and three years probation.
“Workers’ compensation insurance fraud is an egregious offense and it will be fully investigated by my Department,” said Commissioner Dave Jones. “Those who would seek to cheat a fund to help workers who were legitimately injured will be prosecuted to the fullest extent of the law.”
On January 12, 2007, State Compensation Insurance Fund Special (SCIF) reported a suspected fraudulent claim to the California Department of Insurance Fraud Division for investigation of suspected workers’ compensation insurance premium fraud. The report alleged that Haas, President of R J Haas Construction Corporation, et al., Saratoga, CA, failed to accurately report employee payroll to his workers’ compensation insurance carrier, SCIF. From July 1, 1998 to June 1, 2005, Haas claimed that he had no employees and that sub-contractors did all the work for his company. However, during this period, four workers’ compensation claims were filed by injured employees. Haas reported payroll to SCIF only after an injury was discovered and then payroll reporting stopped shortly thereafter, with the cancellation of his policy. Subsequently, Haas obtained workers compensation insurance policies through First Comp and again reported minimal to no employees.
An investigation by the Silicon Valley Regional Office of the California Department of Insurance, Fraud Division and the California Employment Development Department (EDD) revealed that Haas misrepresented office staff, project superintendents, foremen, and even some of his own family members as subcontractors. A forensic audit was conducted and revealed that Haas owed $594,293.22 in insurance premiums to SCIF, $229,167.71 in insurance premiums to First Comp and $813,328.27 to EDD for failing to accurately report employee payroll for the purpose of determining employment tax liabilities.
On April 29, 2009, Haas was arrested for felony violations of Insurance Code. Haas is eligible to apply for a home electronic monitoring program in lieu of county jail time. At time of sentencing Haas had already paid the full amount of restitution owed to insurance carriers SCIF and First Comp and to EDD.
Earlier this week, a Brooklyn, NY tortilla factory employee died after falling into a waist-high dough mixing machine. Now, the state has closed the factory because authorities discovered the company’s workers compensation policy had lapsed in March 2010.
A NY State Workers Compensation spokesman said, “The owner would need to get the insurance and pay fines before he is permitted to reopen.” While the Workers Comp board doesn’t always shut down companies where the insurance is lapsed, the fact that there was a workplace death prompted officials to visit the tortilla factory. As it stands, the company owes $56,000 in penalties. OSHA and the Department of Labor are also looking into the incident.
This $56,000 in outstanding penalties is sure to be dwarfed by lawsuits likely to be coming from the employee’s family and surviving members. All this could have been avoided or significantly curtailed if the factory owner carried the workers compensation insurance coverage required by law.
The very core of workers compensation insurance is that it provides medical care for employees who are injured in the course of employment. Beyond medical care, Workers Comp insurance provides temporary and/or permanent disability benefits, supplemental job displacement benefits or vocational rehabilitation and death benefits. Workers Comp is a trade-off between employers and employees. Employees receive prompt effective medical treatment for on-the-job injuries or illnesses no matter who is at fault and, in return, are prevented from suing employers over those injuries.
The tortilla factory’s owner was reached on the phone by a newspaper Friday but said he couldn’t talk and hung up. He had previously said that the death was the first worker injury at the company and said it had been caused by “human error.”
Unfortunately, business owners usually learn the hard way when it comes to a loss. This being a prime, and severe, example. Personally, I would be surprised if this business survives considering what surely lies ahead with lawsuits, etc.
The difference between independent contractors and employees is a common debate within the insurance world. I wrote another post about it back in August, but the question continually arises, so it’s worth reinforcing. Determining which is which, employee vs. independent contractor is all fun and games until someone gets hurt. As an employer, think about the following points from the California State Compensation Insurance Fund before trying to dance around paying workers compensation insurance premiums.
California courts typically use a number of tests to determine whether an individual is an employee or an independent contractor. A crucial factor in determining employment status is the employer’s right to direct and control the work being performed. If you have the right to control the manner and means of the work performed, the courts have routinely decided that the “independent contractor” is actually your “employee”.
There are many other factors, but the reality is there is no definitive test to determine employee or an independent contractor. The following circumstances can help determine the relationship between the two. Among them, whether the person performing the service:
- Has the right to terminate the relationship at will.
- Is engaged in a distinct occupation or business.
- Has voluntarily chosen the burdens and benefits of self-employment.
- Has the skill required in the particular occupation.
- Supplies the instrumentalities, tools, the work location, and carries the license or certificate required to perform the work.
- Has the right to hire and terminate others.
- Is paid by the time worked, or by piece rate.
- Works under the direction of the employer or by a specialist without supervision.
- Whether the services are a part of the regular business of the employer.
- Whether the parties believe that they are creating the relationship of employer/employee or employer/independent contractor.
If there are questions, the Labor Code assumes a worker is an employee for workers’ compensation purposes. The burden of proof to support the independent contractor status of a worker falls on the employer. The Labor Code also requires that any subcontractor who does not have an active valid contractor’s license be treated as an employee, not an independent contractor. However, even though a worker may have a valid license, the worker may still be an employee depending on the factors as discussed above.
A good rule of thumb: as an employer, always protect yourself.
- If certain jobs require a license, request a copy for your records.
- Obtain original Certificates of Workers’ Compensation Insurance addressed to you from all contractors and subcontractors who have employees or who, in turn, subcontract any portion of their own work.
Remember, it’s all fun and games until someone gets hurt. If proper documentation is not maintained and presented to insurance auditors, carriers are obligated to charge premium for any liability that may exist under your workers’ compensation insurance policy.
When you think about workplace injuries and workers compensation insurance, what are the first thoughts that come to mind? Perhaps the cost for medical care and rehab? Compensation for lost wages? Legal services related to a claim?
Have you ever thought of the hidden costs associated with workplace injuries? Consider the following:
- Lost productivity from an experienced employee
- Equipment or product damage
- Lost efficiency among employees
- Time spent completing forms and communicating with medical providers and insurance adjusters
Hidden costs are those costs that are not immediately recognized, but take a toll on business profitability. These hidden costs are not typically covered under a workers compensation policy and drain from a business’s bottom line. This is why a Return to Work (RTW) Program should be implemented to help control costs.
What is a Return to Work Program?
A return to work program gets an injured employee back to work in a productive position when they are physically capable; not necessarily the position they had at the time of injury. There are studies show that the longer an injured employee is off work, the more difficult it becomes to get them back into the workplace. A return to work program keeps the employee engaged in a work based routine, interacting with fellow employees and contributing productively to the business.
For a Return To Work Program to be effective, communication must occur. Prompt notification of the injury to your insurance carrier allows the carrier to work with the injured employee and medical provider to assess the employee’s physical capabilities after the injury. From there, your carrier and provider can work with you to develop a plan to return the employee to work.
Benefits of Returning Employees To Work
Accepting an injured employee into the workplace can help your business:
- Regain lost productivity.
- Avoid temporary or new employee hiring and training costs.
- Reduce or avoid litigation and discourage malingering.
- Increase awareness of safe work practices.
How to Develop a Return To Work Program
- Identify the physical demands of jobs or tasks. Involve key employees to help with this task. Evaluation forms are available from the Safety and Health Department.
- Identify transitional jobs that an injured employee could perform. Full time work is not required. Injured employees may work fewer hours and at a lower wage and be eligible to receive compensation benefits. This reduces insurance costs which may affect your insurance rates for several years.
- Tell existing and new employees during orientation that your company has a RTW Program and at time of hire. Let employees know that if they are injured on job, the company will attempt to find modified work for them.
- Before an injury occurs, speak with your designated medical provider or doctor. Tell them that you have a RTW Program, and that you have jobs to accommodate an employee who has physical limitations.
A RTW program can help control workers’ compensation costs after an injury occurs; however, the best method to control these costs is to prevent injuries through an effective Injury and Illness Prevention (IIP) Program. Contact the Safety & Health Department for a model IIP program.