Transcript Possible Slides for the September 13 Program

Paramedic Systems of
Wisconsin
20th Annual EMS Conference
Insured & Uninsured Costs
• There are 2 types of costs associated
with accidents
– Direct Costs – normally covered by
insurance
– Indirect Costs – normally not covered by
insurance
Costs of an Accident
• We are going to talk about the different types of
losses that the underwriter needs to rate to
cover your risk and then you need to convince
him that you should get a quote.
– Worker’s Compensation.
– Liability exposure – both bodily injury and property
damage.
– Auto Physical Damage exposure.
– Uninsured or hidden costs of accidents.
What does the Underwriter think of
when they are rating your risk?
Workers’ Compensation
Premium
• A Workers Compensation premium is based on pay
roll, job classification and loss history
• Rates are determined by the state for each job
category i.e.,
• The experience modification formula is based on
expected losses to actual losses.
– frequency
– severity
– 3 years of experience
• For 2007 policy year use 2003, 2004 and 2005
• For 2008 policy year use 2004, 2005 and 2006
Workers Compensation Rates
– Description: POLICE OFFICERS & DRIVERS
•
•
•
•
10/01/2007
10/01/2006
10/01/2005
10/01/2004
$3.12
$3.08
$3.09
$3.14
– Description: FIREFIGHTERS & DRIVERS - NON-VOLUNTEER
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•
•
•
10/01/2007
10/01/2006
10/01/2005
10/01/2004
$3.92
$4.10
$4.36
$4.64
Ambulance Service Companies
•
Code 7380 - Description: DRIVERS, CHAUFFEURS, MESSENGERS, AND THEIR HELPERS NOC-COMMERCIAL (Applies
to employees engaged in such duties on or in connection with a vehicle. This classification also includes garage employees and
employees using bicycles in their operations. Duties include, but are not limited to, delivering products owned by the employer.
Code 7380 does not apply when the basic classification wording includes drivers, chauffeurs and their helpers. If a separate
legal entity is established for delivery of products owned by the employer, assign exposure to Code 7228 or Code 7229. Subject
to Rule IV.B. Messenger and courier deliveries of owned documents or goods made by foot or public transportation are
assigned to the governing class code.)
CHAUFFEURS, DRIVERS, MESSENGERS, AND THEIR HELPERS NOC-COMMERCIAL (Applies to employees engaged in
such duties on or in connection with a vehicle This classification also includes garage employees and employees using bicycles
in their operations. Duties include, but are not limited to, delivering products owned by the employer. Code 7380 does not apply
when the basic classification wording includes drivers, chauffeurs and their helpers. If a separate legal entity is established for
delivery of products owned by the employer, assign exposure to Code 7228 or Code 7229.)
DISTRIBUTING CO (Employees transport to location in cars & trucks.)
GEOPHYSICAL EXPLORATION NOC-ALL EMPLOYEES & DRIVERS (Core drilling to be separately rated as Code 6204Drilling NOC.)
ICE CREAM VENDORS - MOBILE & DRIVERS
AUTOMOBILE TRANSPORT DRIVING CARS ON RAILCARS
AUTOMOBILE TRANSPORT SINGLE OR IN TANDEM
BANKS AND TRUST COS-ARMORED CAR CREWS-NOT CONTRACT
SANITATION SERVICE - DRIVERS
SCHOOL BUS DRIVERS (Drivers employed by school.)
SEA WEED OR LAKE WEED - TRUCKING - ON LAND
SOFT DRINK DISTRIBUTORS - DRIVERS
TELEPHONE BOOK DELIVERY
WATER SAMPLES FROM INLAND LAKES
WINE OR SPIRIT MERCHANTS-DRIVERS
AMBULANCE SERVICE COMPANIES: ALL EMPLOYEES & DRIVERS
AUTO HAULAWAY OR DRIVEAWAY & DRIVERS: DRIVEAWAY & TANDEM
FIRE EXTINGUISHER - SERVICE OR RECHARGE & DRIVERS
Ambulance Service Companies
• 7705 Code: Description: AMBULANCE
SERVICE COMPANIES AND EMS
(EMERGENCY MEDICAL SERVICE)
PROVIDERS & DRIVERS
Ambulance Service Companies
•
•
•
•
•
•
•
Code 7380
10/01/2007
10/01/2006
10/01/2005
10/01/2004
10/01/2003
07/01/2002
$5.26
$6.05
$6.33
$6.14
$6.63
$6.33
•
•
Code 7705
10/1/07
$5.26
Compare Ambulance Service to Fire
• Ambulance Service Companies (code
7380) is 79% higher than the fire code
over the last 20 years.
• That is a $2.18 rate difference.
• Risk is so bad that the WCRB is splitting
out the exposure into its own code 7705.
Experience Mod - Example
• Your losses have a direct impact on
your experience modification factor
• A bad year stays with your for 3 years in
terms of its impact on your WC premium
• Employees wages while on light duty
are not charged against your loss
history
• Employees off on WC can impact your
insurance for 3 years
Experience Mod - Example
• 1.00 - break even
• 1.20 - $1.20 per $1.00 in insurance
• .80
- $ .80 per $1.00 in insurance
Experience Mod
Example
• If your manual premium for your business is
$50,000. (That is rate times payroll times .01)
• An experience mod of 1.0 - you pay $46,580
for your WC insurance
• Range of mod’s for CVMIC Members
is .62 – 1.48
• With a mod of .62 you pay $29,309
• With a mod of 1.48 you pay $68,396 for the
same insurance
Accident Costs - continued
• Direct Costs:
– Medical
– Lost wages – when covered by WC
– Permanent partial disability
– Total disability
Accident Costs - continued
• Indirect Costs:
– Employee benefits &
wage continuation
– Investigation
– Supervisory time
– Claims handling time
– Reports and paperwork
– Equipment damage and
3rd party liability
– Lost productivity
– Rescheduling staff
– Overtime
– Retraining
– Reduced productivity
and morale
– Increased workers’
compensation costs
– Hiring and selection
costs
Accident Costs
• When considering a workers
compensation accident it is not uncommon
that “indirect or hidden” costs can be 4-10
times “direct” costs (medical, indemnity
and permanent partial disability)
Cost of a Vehicle Accident
Example #1
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•
•
•
•
•
•
•
Medical payments
Wage payments ($20/hr - 1 wk)
Third party liability
Property damage
Supervisor’s time ($30/hr - 5 hrs)
Personnel's time ($25/hr - 5 hrs)
Overtime (1 wk )
Total cost
Direct WC costs
Indirect costs
Ratio
$ 400
$ 800
$ 3,500
$ 1,000
$ 150
$ 125
$ 400
$ 6,375
$ 1,200
$ 5,175
5.3 to1
Cost of an Accident
Example # 2
• Employee ($20/hr off)
$ 240 $ 514*
(employee misses 1 1/2 days)
• Medical (emergency room)
$ 120 $ 120*
• Overtime ($10/hr)
$ 80 $ 566*
• Supervisor’s time ($30/hr – 2hr) $ 60 $ 60*
• Personnel’s time ($25/hr – 2hr)
$ 50 $ 50*
• Total costs
$ 550 $ 1310*
• Ratio
4.6/1 10.8/1*
• Fire Fighter *
Accident Costs for a Vehicle
Accident
• Third Party Liability
• Auto Physical
Damage
• Workers
Compensation
• Hidden Costs
Cost of a Vehicle Accident
•
•
•
•
•
•
•
Third party liability
$ 3,500 (Auto liability)
Property damage
$ 1,000 (Auto Physical)
Medical payments
$ 800 (WC)
Wage payments ($20/hr-2 days) $ 320 (Hidden)
Supervisor’s time (30/hr-3 hrs) $ 90 (Hidden)
Overtime (2 days )
$ 160 (Hidden)
Total cost
$ 5,870
• How much of the above is covered by insurance?
• How often do you see the true cost of an accident?