It’s not your imagination that the cost of doing business in New York keeps climbing. The increasing costs of Workers’ Compensation insurance in New York are a major part of the overall increased cost of doing business in the state.
On top of rate increases of 9.1% in 2011 and 7.7% in 2010, the New York Compensation Rating Board is seeking an 11.5% increase in workers compensation rates for 2012-13 which would go into effect October 2012 if approved.
Why do workers compensation rates keep climbing in New York? As a recent series of articles in the New York Times eluded to, despite ongoing reform effort, the New York Workers Compensation system serves no one well and is arguably the most adversarial of any state in the nation. Medical and lost time costs are up and the reforms adopted in 2007 that were expected to produce significant savings have been implemented at a slow rate. Also the maximum weekly benefit (for lost wages) has essentially doubled over the last five years and now stands at $772. Further, actuary Oliver Wyman is forecasting that the average cost of a lost time claim in New York occurring in 2012 will exceed $100,000!
Since there’s nothing a company can do to avoid buying this insurance- it’s required by law- the key to reducing what you spend on it is to keep the number and amount of claims low. Keeping claim costs low requires sound claims management, implementing an effective safety program and selecting the appropriate insurance carrier. Contrary to what many think, your broker is not always the best person to help you with these issues. An independent risk management and insurance consultant can help you manage claims and implement an effective safety program thereby reducing Workers’ Compensation costs.
To learn more on what measures you can take to reduce your businesses Workers’ Compensation costs, please contact Albert Sica at 732.395.4251 or at [email protected].
