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Workers’ Compensation Loss Prevention

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Presentation on theme: "Workers’ Compensation Loss Prevention"— Presentation transcript:


2 Workers’ Compensation Loss Prevention
Title screen. Copy and paste this image into the slide sequence shown at left, wherever you want to add a title slide.

3 Safety as a profit center

4 Stop Injuries What is the single most important factor to prevent employee injuries and vehicle accidents?

5 Overt management commitment
Stop Injuries Overt management commitment When the employees believe that you are committed to their safety, they will stop having accidents…Uncomfortable?

6 Stop Injuries Case studies Fatality investigation Fingers crushed
Internal audit response… disappointed Steel Pigment manufacturer Eastern Region… post fatality

7 Case History #1 – Fatality
Tommy Brubaker Machinist Midnight shift Lathe Warnings? Jackets Accountability?

8 Case History #2 – Crushed Fingers
Trailer manufacturer Punch press operator Dual actuator buttons Three fingers crushed Warnings? Accountability?

9 Case History #3 – Audit Response
Bhopal tragedy UCC internal audit Cleanup True commitment?

10 Case History #4 – Steel Company
High quality rail road wheels Poor labor relations Emerged from bankruptcy Projection of $1.1 million in workers compensation losses per year.

11 Case History #4 – Steel Company
$38M sales, $3.5M W/C premium Significant evidence: Exaggeration Misapplication of benefits …workers’ compensation was used in lieu of health or unemployment benefits

12 Case History #4 – Steel Company
The Solution Successful proactive loss prevention program Supervisors trained in accident investigations, modified duty, and profit consequences Safety committee was refocused from complaint evaluation to injury prevention

13 Case History #4 – Steel Company
Results… First year: 50% reduction in injuries 66% reduction in costs $1M premium reduction

14 Case History #5 – Pigment Manufacturer
PA company bought similar VA company Due diligence – W/C insurance Zero reported injuries True?

15 Case History #5 – Pigment Manufacturer
Facility inspection FX, floor holes, open vats, bicycle chains/gears, housekeeping, machine guarding Owner interview – 0 injuries

16 Case History #5 – Pigment Manufacturer
How was injury rate so low? Onsite owner impact, owner attention Remote owner… prediction

17 Case History #6 – Eastern Region
Fatality New safety consultant 12 months (training, investigations, STOP, etc.) Worst to first

18 The maximization of profits comes from the minimization of losses
Peter Drucker The maximization of profits comes from the minimization of losses Proactive Loss Prevention

19 Proactive risk management vs. traditional loss control Applies to
Two Safety Paradigms Proactive risk management vs. traditional loss control Applies to Workers’ Compensation Vehicle Liability

20 Where proactive risk management works?
Security Services Grocery Delivery Fleets Temporary Service Employers Restaurants Iron & Steel Manufacturing Hospitality & Healthcare Institutions Welding Gas Distributors

21 The Complete Risk Management Program

22 Loss Control vs Risk Control
Loss Control (Traditional Approach) Manages Costs After Loss Experience In Short, “Reactive” Insurance company responsibility Risk Control (Alternative Approach) Manages Performance Before Experience In Short, “Proactive” Your responsibility

23 If Common Today Poor Planning Lack of Training Unsafe Conditions Possible Tomorrow On Site Accidents Injury/Death

24 Case Study #1 Client – Midsize Welding Gas Distributor Problem
30 vehicle units - 6 months 9 preventable accidents 2 non-preventable accidents Solution - A structured program Outcome 0 preventable accidents

25 What made the difference? Commitment! Accountability
Case Study #1 What made the difference? Commitment! Accountability First Executive Safety Committee meeting – all OK Second meeting – commitment Third meeting - performance

26 Why Practice Prevention???
Preventing losses IS possible! Always less expensive than traditional loss control approaches Less equipment damage and downtime Fewer customer issues Professionalism rises Profit is improved

27 10 essential elements 1. Management leadership
2. Assignment of responsibility and accountability 3. Maintenance of vehicles, equipment 4. Pre-employment checks 5. Establishment of effective safety committees and training

28 10 Essential Elements 6. Accident record keeping system
7. Medical and first aid systems 8. Acceptance of personal responsibility by employees 9. Post loss management activity 10. Results monitoring and program evaluation

29 Management Techniques
Systematic accident investigations Major, minor, near miss National Safety Council guidelines for determining preventability Operator and driver/supervisor training Personnel and vehicle safety incentives & communication Discipline & accountability

30 Benefits of Prevention
Humanitarian Less pain Regulatory Compliance Avoid OSHA/DOT hassles, citations Financial Lower costs, liabilities, down time Business/Officer Protection Documentation, manual, program

31 How to measure the company’s real safety performance?
Whose performance?

32 Your performance How to measure…
You (owners, line managers) are accountable … or can become accountable Case Study – Temporary Service Employees Case Study – Fraud, Pasadena, CA

33 Industry Comparison

34 How to measure your real safety performance? Long term – W/C rate
Professional, unbiased numerical appraisal

35 How to measure your real safety performance?
Short term Non-injury incidents (near misses) First Aid Cases Recordable injuries Lost workday cases

36 Fatalities Lost Time Cases Recordable Injuries Medical Visits/First Aid Cases Unsafe Behaviors/Unsafe Acts

37 Insurance company structures (policy, rent-a-captive, captive, self)
W/C Insurance Insurance company structures (policy, rent-a-captive, captive, self) Premiums adjust for 3 years plus 1 Do some insurance companies care about your performance?

38 W/C Insurance Insurance companies are designed to make more money when you have more injuries Case Study - Rapid City

39 Experience Modification Factor (XMod)
W/C Insurance Experience Modification Factor (XMod) Frequency – each injury counts as 1x Severity – Lost workday cases count about 10x

40 W/C Insurance - Frequency
Control your frequency by stopping accidents Accountability Measurement Training Overt commitment

41 Dupont STOP Program

42 STOP For Employees Concepts

43 STOP Safety Cycle

44 W/C Insurance - Severity
Control your severity by managing the case: Assertive return-to-work Professional medical treatment Trusted doctors (2-way trust) Fight suspected fraud

45 The maximization of profits comes from the minimization of losses
Peter Drucker The maximization of profits comes from the minimization of losses Proactive Loss Prevention

46 Q&A

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