Not Getting TCOR Management?
You're Getting The Shaft.
The way to understand the real value of your coverage is by appreciating your Total Cost of Risk (TCOR). Three factors affect your TCOR: Preventive, Direct and Indirect Costs.
Take a closer look at the true costs that make up your insurance expenses. When you look at an insurance company loss run, all you see is the expenses the insurance company cares about – the medical and lost time expenses that they will pay for. What about all the other expenses that come out of your pocket? Who is helping you manage those?
For a partial list of expenses comprising the Total Cost of Risk, take a painkiller
Oops.
- Losing jobs because your TCOR is too high relative to your peers
- Losing the ability to bid jobs because your EMR (Experience Mod Rate) is higher than 1.00 (what we like to call the “threshold of fear”)
- Time lost from work by injured employees
- Public relations issues related to liability suit or auto accident
- Senior management time dealing with law suits, depositions, attorney consultations
- Damage to company morale especially in the event of a serious injury
- Cost of recruitment, orientation & training of new or replacement employees
- Loss of productivity
- Damage to equipment or vehicles or material
- Supervisory time responding to the employee injury
- First aid to injured employee and/or transportation to clinic/hospital
- Supervisor completes accident investigation report
- Claim coordinator reports to insurance company and then manages lost time
- Other employees will stand around and talk about the injury
- Safety committee and senior management get involved to discuss in order to prevent a recurrence
- Safety training is researched and initiated to prevent a recurrence
- Production needs to be continued by replacement workers
- HR/Claim staff needs to monitor progress of claim settlement, coordinate care with treating physicians, answer questions of injured employee, attend hearings, etc.
- Updating records (federal, state, OSHA, insurance carrier)
- Coordinate & discuss settlement provisions with attorneys
- OSHA fines
- Pre-employment screening
- Post-accident alcohol/drug testing
- Personal protective equipment (PPE)
- Toolbox talks
- OSHA-mandated training
- Safety committee meetings
- Higher premiums due to high EMR (Experience Mod Rate)
- Higher premiums due to adverse loss experience
- Uninsured claims
- Lawsuits resulting from failure to comply with contract insurance requirements
- Violation of employment laws
- Time spent managing Certificate of Insurance compliance issues
- Medical visits while on light duty
- Decreased productivity while on light duty
- Claim reviews
Evaluate Coverage by the Losses You Prevent and the Risks You Avoid.
Your expenses go far beyond premiums. In fact, your hidden costs could be twenty times the actual cost you see on a loss run. That’s where a good Risk Advisor can provide you with the tools to prevent and minimize your real exposures—giving you more control to eliminate hidden expenses, lower your Experience Mod Rate, and ultimately succeed where your competitors fail.