Pursuant to a new valuation of the NSW Workers Compensation Scheme just released, the Government is passing savings from improved claims management back to employers. As a result a 10% reduction in premium costs took effect with policies commencing on or after 30 June 2006 and a further 5% deduction will occur with policies commencing on or after 31 December 2006.
Despite this, the NSW Government's new workers compensation premium discounts are not all good news for small business. Just a single “dishonest” workers compensation claim can have a major impact on the premium and the annual renewal cost payable by the employer.
The above discounts should be seen in relation to the substantial premium increases that can arise from just a single “false” claim. Depending on the claim, this can amount to the tens of thousands of premium cost increase.
Such a claim can easily arise, especially where an employee suddenly finds that their services are not required. The frequent recourse is to a fictitious workers compensation claim being made.
An employer cannot expect much, if any, help from an insurer in assessing potentially fictitious claims. Statutory deadlines require the submission of the claim details no later than 7 days after the event, and immediately if a serious incident.
So what options does the employer have with regard to obtaining in this short time frame help with not only obtaining all the facts but assessing same as well? Increasingly employers are finding themselves in this position. Hence the information that goes to the insurer is at best incomplete at worst inaccurate . And this can be very much to the financial detriment of the employer.
Employers stretched to the limit with demands in just running the business have simply no time to fully investigate what may or may not be a fictitious claim. Moreover, the insurer compounds the problem for the employer by imposing severe time limits on lodgment of a claim.
No help is to be found in how to place before the insurer all the relevant facts that may demonstrate the claim is not genuine or at least that the employee has been responsible for more than a little contributory negligence.
The next link in the chain connecting the employer to the insurer is the insurance broker. Again, there is often little help arising from that quarter. The exception is usually if the business is an employer of workers in the hundreds or thousands, in which case the brokers servicing these big corporate players may have ‘advisers’ the employer can access. But the usual SME is all on his or her own. You might be told that you need to put in place a proper investigative procedure to assess the claim, a proper evidence gathering procedure to either substantiate the claim or refute same and a Return to Work program, aligned to the RTW Plan of the Insurer. But how many SMEs have the nous, the time and the extra pair of hands to do the work with an SME struggling to just run the business day to day?
Realistically speaking SME employers have but one option in their need to find help. And this takes the form of either putting in the hours to be prepared to handle an accident / injury , conduct a factual investigation , establish the grounds for assessing the claim and determining whether this a genuine injury caused by the work related tasks of the worker. Alternatively, contract with a consultant to assist the business. Remember, this preparation commences with your business’ application for employment form, induction program, consultation, hazard identification, incident investigation ,factual data assessment , claim preparation and on the job training. Its not easy but it could save your business many thousands of dollars in increased premium costs.