Restaurant Workers Compensation Insurance – Avoid The Small Loss Temptation

Most restaurant owners understand the basics of workers compensation insurance and most have heard of the experience modification factor. And to show how a little bit of knowledge can be dangerous, many restaurant owners even know that a lot of small losses can have a dramatically negative impact on this modification factor. But using this knowledge in the wrong way can lead to behavior that carries far too much risk for the average restaurant owner.

You see, when it comes to the NC workers compensation insurance policy, the experience modification factor calculation is broken down into two parts. One part measures small losses and attempts to account for loss frequency in an organization, while the second part measures loss severity. This first part weighs all losses under $5000 equally. So, if you have an employee who gets something in his eye and runs down to the local doc in the box for treatment, I can understand your desire to just pay the $100 to the doc in the box yourself and move on without filing the claim. But I’m here to say that although this strategy looks pretty brainy at first blush, it is not without tremendous risks.

The problem for you as the restaurant owner is that you don’t really know where any given work comp claim may lead. What at first looks like a routing eye wash claim could end up with an infection and even permanent partial disability. And if the insurance company thinks that you have made the claim worse by failing to notify them of the injury, then the can fight you on this claim and potentially leave you holding the bag for the claim. Paying a long term disability claim out of your pocket could possibly ruin your company and take from you all that you have worked so hard to build. And what you stood to save on your mod is just not worth the risk of losing your business. So please, always file each and every workers compensation claim within 5 days of the injury and resist the temptation to pay these claims out of your pocket just to protect your experience modification factor.

If we can help you with your restaurant insurance needs, please call us. We have developed several specialized restaurant insurance programs to make sure your round peg is not jammed into a square hole. We have a fine dining restaurant insurance program, a casual dining restaurant insurance program, a fast food restaurant insurance program, a bar and grill restaurant insurance program and even a catering company insurance program. If we can help, please call us, toll free, at 877-687-7557 or visit us online at www.TheRestaurantInsuranceStore.com.

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Restaurant Workers Compensation Insurance – Protect Your Mod

Most restaurant owners have at least a general knowledge of workers compensation insurance. They know that they need it and they know it can cost a lot of money. But only a few really understand the experience modification factor and what it could mean for their future restaurant insurance policy costs. This little primer will help you understand just how important it is to protect your mod and how to do it.

The experience modification factor of workers compensation policies, referred to as the experience mod or just mod for short, is the insurance industry’s way of assigning higher rates to businesses with poor loss experience and lower rates to those who have had more favorable loss experience. Each business has its own unique experience modification factor and this factor is applied to the rates on their policy. For example, if you have had a lot of losses, or perhaps a few large losses, you might find yourself with a mod of say, 1.35. If this is the case, then your workers compensation insurance policy premium will be adjusted upward by 35% to reflect your bad experience. Likewise, if your restaurant hasn’t has a work comp loss for several years, your mod might drop as low as .80 and this would mean a 20% reduction in your overall workers compensation policy premium.

So how is this mod calculated? Well, the first thing you need to know is that the mod is calculated based on past experience. That means what happens today will take several years to come back and bite you. Also, the experience period for the mod in North Carolina is 3 years, so once you get some losses in your mod calculation, they will stay there a while. I want to leave a more detailed explanation of how the mod is calculated to a later blog, but for now, understand that it is not only the number of losses (called frequency) that plays a part, but also the amount paid out (called severity) that impacts the mod calculation. And a little of both, frequency and severity can really run up the mod.

So what can you, as a restaurant owner, do to protect your mod? A lot of how your mod will affect you, both good or bad will be determined by which insurance company you choose for your workers compensation policy. I say this, because, although you may be as careful as you can to avoid injuries among your workers, there is no substitute for an insurance company that is actively working for you to help you prevent claims and reduce the severity of existing claims.

Choose a workers compensation insurance company that will work with you to help you with both prevention and severity reduction. Prevention can come in the form of safety inspections, and loss control techniques that the insurance company can share with you. Reduction can come in the form of programs that help your injured workers get back to work more quickly. Some of the best workers compensation insurance companies even have their own nurses and doctors. Also, you want to purchase your workers comp coverage from a company that assigns case managers to each claim to stay on top of all the medical bills and the disability payments to keep the payout as small as possible.

At Clinard Insurance Group, in Winston Salem, NC, we specialize in helping restaurant owners navigate the complex waters of insurance policy and insurance company selection. We can help you find a pro-active insurance company that will help you reduce the number of work comp claims and keep the claims that happen from spiraling out of control. Because restaurants are our specialty, we can help you with your restaurant insurance needs whether your restaurant is a fine dining establishment, a casual dining restaurant, a fast food restaurant, a bar and grill or tavern, or even a catering company. We have built special niche programs for almost every kind of restaurant out there and we encourage you to call us, toll free, at 877-687-7557 or visit us on the web at www.TheRestaurantInsuranceStore.com.

The source information for this article was taken from other articles which can be found in their entirety at www.RestaurantInsuranceGuy.com.