Workers’ compensation is costly insurances that can create a significant impact on a businesses’ profit. Companies can stay financially stable by identifying means on how they can effectively cut down on such expenses while still maintaining appropriate insurance coverage for their employees.
Let’s take the construction business as an example. It is estimated that at least one out of ten construction labourers suffer injuries while at work each year. Because of such safety-related risks, insurance providers see construction and development as one of the most high-risk industries, regardless of how healthy a company’s employees are. Because of that, construction businesses seeking insurance for their employees are given expensive workers’ premiums.
One of the best ways to reduce workers comp cost is to have a risk services company that specialize on worker insurance claims management do an audit of your company’s health insurance. Insurance providers can erroneously increase premium rates due to assumptions of industry-related risk. An audit of existing policies can help your insurance providers view profiles in a different perspective to reduce premiums.
Most construction firm employees live relatively active lives. Often, they consist of young males who are fit and health and are engaged in sports activities, and therefore have less risk for health conditions like heart problems and diabetes. Yet, insurance carriers tend to generalize all construction employees and view their profiles as negative instead of focusing on that positive aspect. Whether we like it or not, insurance providers are driven by profit, and audits make sure that businesses -especially those that entail high risks - are not being overcharged by insurance companies.
An audit achieves this by eliminating the subjectivity from demographic details so that just and proper underwriting can be executed. It also provides fresh perspectives and strategies on how an employer can reduce premium costs so he can have better control on policy renewals. But best of all, audits benefit the people for whom they are designed: the employees.
Auditing makes use of risk models and software, effective underwriting and analysis. It is a reassessment of the existing health benefits that a company is insured in, followed by a repeat underwriting to identify the risks assumed by insurance provider (may be past or present) as well as the risk models used to arrive at the provided rates, so an insured employer can decrease associate insurance costs without necessarily decreasing the benefits involved.
The risk management firm would employ an auditing process for in-depth examination of the formulas utilized by the insurance provider. Often auditing firms would find out that there are miscalculations and unjustified assumptions and ratings. After that, the auditing team will assess the difference between the current premium charges and what really should be charged outside of the incorrect calculations. A negotiation to reduce the price of the premiums then begins.
In high-risk industries, employers tend to pay for costly worker premiums due to assumed risks made by insurance companies. By obtaining the services of a risk management company, you can lower down premium costs, taking to consideration only genuine risks.
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Reducing Workers’ Premiums through Auditing