Workers Compensation for Small Business

The relationship between a business and the insurer team managing their claims is critical and must be built on open communication, collaboration and a commitment to high levels of service.

Where this fit exists we see good execution of claims management strategies geared towards achieving safe, timely and sustainable return to work outcomes.

In states such as QLD, SA and SME businesses in NSW there is limited choice in selecting who will manage their workers compensation policy and claims. However in WA, ACT, TAS, NT, VIC and large businesses in NSW there is the ability to select an insurer who they wish to partner with in these jurisdictions.

Motivations for doing so include:

• Accessing better claims service and in turn higher quality claims management outcomes
• Enhanced claims and injury reporting offering better insights into workers compensation data
• A consolidated approach to account and relationship management
• Accessing more competitive premium rates by consolidating a program with the one insurer in states where this can be realised

We have a sizeable book of business with all insurers in the Australian market and are well positioned to provide guidance around the best fit for a particular business. As part of this process, we can facilitate a robust formal tender exercise including developing the response for tender document issued to the market, facilitating presentations from the prospective insurers, ensuring a smooth transition to the new insurer and implementing strategies for best practice management of any tail claims (if applicable).

In the risk states and territories (WA, ACT, TAS and NT) policies are underwritten by private insurance companies in a competitive and 'true insurance' environment. Policies can be marketed each year and variables such as claims performance, Work Health and Safety Management System (WHSMS) sophistication, insurer appetite, industry performance and broader economic conditions will dictate rates the market will provide for a risk.

Employers are required to maintain a separate policy in each state and territory, however, multiple legal entities in one state can be insured under a single policy. Extensions to risk state policies may be granted for Principals Indemnity/ Waivers, Common Law extensions including (Industrial Disease and Overseas — mainly WA but also NT). Performance of all clients is dictated by the individual loss ratio (five years claims against five years premium collected).

We offer a range of services to support each risk state workers compensation scheme such as:

• Placement services & access to insurers to negotiate competitive pricing
• Injury management claims services
• Premium industry benchmarking
• Claims and injury management services assisting early return to work
• State-of-the-art benchmarking and analytics designed to take advantage of market trends.

Our skilled team is here to safely and simply navigate you through the renewal of your workers compensation policy with the minimum of fuss.

In the risk states (WA, TAS, NT and ACT) five years historical performance is relied upon. In NSW, QLD and VIC a three year claims history is relied upon. Sales, HR, IT and management are usually considered incidental activities. WA, TAS, NT, ACT and VIC continue to estimate for likely future claims costs incurred.

We have identified a number of key drivers of workers compensation placement solutions and can provide the following to our clients:

• Geographical coverage in all states
• Assistance with self-insurance
• NSW Loss Prevention Recovery (LPR) and national conventional scheme clients
• Exceptional insurer relationships
• Flexibility in tailoring our offering to client requirements
• Competitive and transparent pricing

Our consultants are well positioned to explore the appropriateness of whether a non-conventional premium arrangement is suitable for your business.

With each state and territory having its own framework for administering their particular scheme, this can make navigating the complexities of workers compensation for a business with a national footprint particularly challenging. Despite this, there are fundamental concepts that are applicable to all states and territories when it comes to controlling and minimising workers compensation premiums.

Specifically, a business that controls their frequency/severity of injury rates and has systems to consistently coordinate return to work when injuries do occur is well positioned premium wise.

For such employers however there are alternative workers compensation premium arrangements that should be considered that may better reward their strong performance with lower premiums.

These alternative premium arrangements usually apply to larger businesses and include (although not limited to):

• State-based self-insurance
• Loss Prevention Recovery (LPR) model (NSW)
• Retro paid loss model (SA)
• Burning cost premium structure (risk states — WA, ACT, NT, TAS)
• Deferred payment plan (risk states — WA, ACT, NT, TAS)

In most instances, these premium arrangements can deliver premium savings and/or cash flow efficiencies to a business however each arrangement also comes with its own set of considerations.

Similarly, the loss prevention recovery model provides a NSW business with a clean slate but increasing adjustment factors could drive premium increases if claims are not managed well in the arrangement.

Our consultants are well positioned to explore the appropriateness of whether a non-conventional premium arrangement is suitable for your business.

Workplace injuries can significantly affect businesses, directly through claims costs and insurance premiums, and indirectly in terms of a loss of productivity. Our initial approach is to meet and discuss the current policy structure and options moving into the renewal period.

This meeting will allow us to obtain a more in-depth understanding of your business structure, claims and injury management procedures, as well as your claims history.

We undertake this task using our workers compensation diagnostic tool 'Compsure'. This is a three-part consultative review designed to assist organisations in gaining a greater understanding of the injury management systems, processes and culture within their companies.

In this review, workplace injury risk refers to three key elements which drive workers compensation costs:

• Workers compensation management
• Claims management
• Injury management

Following the completion of the assessment, organisations are provided with a detailed report outlining the strengths and weaknesses in their approach to managing workplace injuries. The report outlines key recommendations that can help the organisation achieve its workers compensation and Injury management objectives. Our team will present this report in a workshop with key stakeholders with a view to developing an action plan that can be implemented immediately.

Claims Cost and Premium Analysis defines targets and sets strategic and tactical action plans to manage claims costs. Many organisations are subject to rising workers compensation claims and increasing insurance premiums over which they feel they have no real control.

We can deliver tangible savings by driving down our clients' monthly claims costs and insurance premiums. We achieve these significant bottom line savings by defining achievable targets, based on a detailed analysis of your workers compensation data, claims costs, premiums, and policies.

We ensure our clients are in control of workers compensation and include:

• In-depth assessment by our expert team
• Analysis of workers compensation claims history
• Review of current approach, practices, and programs
• Risk assessment and opportunity analysis
• Identification of fail points and problem areas within the organisation
• Reports setting out key findings and strategies for problem rectification
• Business case demonstrating the return on investment
• Forecast savings from reduced workers compensation premium

An independent analysis and report on your entire workers compensation management arrangements. The report will benefit businesses who are bearing the typical burdens of poor workers compensation performance, including rising premiums, high claim volumes, poor agent relationship, or a 'workers' compensation culture'.

With our help, your business can turn the situation around. Our consultants can identify where your gaps are and make tangible improvements that can result in substantial cost savings as well as a safe and productive workplace.

Claims — we conduct a desktop review of high cost, difficult to manage claims, including any current potential for cost reduction. Additionally, we analyse common themes in critical claim events, including primary and secondary causation, return to work attempts and liability determination.

Policies and procedures — we provide a gap analysis of your policy and procedure suite, with a key focus on early intervention, return to work and prevention.

Premium — we investigate your premium trajectory, how premium payment is structured across your business, as well as levels of workers compensation literacy across management levels. Do managers understand how return to work decisions affect premium costs? Are there structural incentives in place to ensure managers are prioritising prevention and early intervention?

Resources — we analyse the resources available (internal and external) to effectively manage existing injuries and prevent new ones, with a focus on the attitudes and confidence of front line managers in managing return to work.

Our strategy reviews are enhanced by our unique in house Occupational Rehabilitation offering to ensure you remain in control at each stage.

We conduct regular, active reviews with our clients, agents/insurers, legal providers and other key stakeholders such as rehabilitation or medical providers.

Our claim reviews are based on the premise that our communication with stakeholders at each review point is clear and concise and continually evaluates the success of each claim, by ensuring that every action on the claim has occurred in accordance with the strategy. To ensure progression of each strategy, continuous improvement is delivered by maintaining a follow up review process with the agent/insurer between every review, to achieve our clients' desired outcome.

Partnering with Gallagher will ensure that all premium possibilities are explored for your business with the view to mitigating risk whilst maximising potential premium savings in all jurisdictions. Through detailed analysis and a proven process for prevention and resolution of claims, we can reduce your claim costs which in turn, reduces your premium.

Many organisations fail to realise that their workers compensation premium is a variable insurance cost that can be reduced well below their industry rate. In addition, while all organisations have budgets for key cost centres across their business, many do not set strategic budgets and targets in relation to their workers compensation premiums.

Your premium to payroll rate is the only true measure of your workers compensation costs and performance against the industry benchmark.

This calculation shows, as a percentage, what you are spending on workers compensation in relation to your remuneration. The remuneration of a growing business will increase, but the premium to payroll rate should not increase.

Regardless of your premium to payroll rate, Gallagher will be able to assist your organisation to introduce new strategies, procedures and training to help reduce your premium and deliver direct bottom line savings.

Lowering your workers compensation premiums is a key opportunity to reduce labour costs while maintaining staff levels and protecting jobs.

It can be achieved by reducing the most important factors driving your workers compensation premium: your claims costs and your claims estimates, Gallagher is able to reduce both of these key costs.

Gallagher guides clients through the process dealing with the many issues that arise, acting as an employer advocate and providing support. Workers compensation is a complex area and requires specialist expertise to navigate. We tailor our services depending on the requirements and in-house capability of our client.

We can take responsibility for the end-to-end management of the workers compensation claims process or work with the HR team to provide specialist support as required. We apply a strategic approach that is designed to protect the interests and wellbeing of both the employee and the employer.

We make a conscious decision to ensure that claims are managed fairly and appropriately for both the employer and the employee. We place an emphasis on return to work programs and can assist with preventative measures and programs to address and mitigate future risks.

We use a range of proactive and practical management tools and approaches that will improve the culture, performance, and wellbeing of employees and organisations.

Our unique approach to Injury Management sees the assessments focus on an employee's capacity rather than their restrictions. This ensures that we are able to assist employees return to work and take their place as productive members of the team within the framework of an injury management program.

Return to work has been proven to be critical in providing for an employee's recovery from injury as well as protecting their long-term psychological health.

A range of services and assessments are available to employers to:

• Assess capacity
• Manage current injuries
• Educate line managers to support their employees

Injury Management Tools

To effectively manage injuries and implement positive return to work programs, we apply the following tools:

• Psychological & Physical Assessments
• Initial Needs Assessments
• Worksite Assessments
• Inherent Requirements of Job Analysis

Through our expertise in Occupational Health, we will effectively manage injuries and return to work programs, improving the culture, performance, and wellbeing of employees and organisations.

The Inherent Requirements of the Job (IROJ) document details the functional requirements of a role from a physical, psychosocial, cognitive, and environmental perspective.

IROJ is mandatory in effective HR and workforce management and assists organisations to take proactive control over aspects such as pre-employment, aging workforce, and workers compensation by ensuring people are able to safely perform their job.

They complement a position description and are utilised in a number of HR, workers compensation, and Occupational Health situations including pre-employment assessment, the management of injuries, ageing workforce management and industrial relations.

Many organisations fail to truly understand the specific requirements of a role which means that employees can be ill-suited or incapable of performing all of their job functions resulting in poor performance, staff turnover, likely injury and costly workers compensation claims.

We utilise a thorough methodology that encompasses:

• Review by qualified Occupational Therapists
• Consultation with HR and line manager
• Occupational interview with staff
• Detailed task analysis and requirements to conduct the job
• Assessment of physical, cognitive, environmental and psychosocial demands of each task
• Review of findings against a position description
• Provision of detailed documentation and photographs

Employers have legal obligations to monitor the health of their workers and implement strategies to support their workers when they know, or ought reasonably to have known, that workers can no longer meet the inherent requirements of their jobs.

Psychological and Physical Assessments determine if employees have the psychological and physical capacity to meet the demands of their jobs.

We support workers by acting on early warning signs of mental and physical illness or injury. This manages risk, reduces longer-term costs and improves the culture and performance of organisations and the wellbeing of employees.

Employers have legal obligations to monitor the physical and mental health of their employees and implement strategies to support their employees when they know, or ought reasonably to have known, of the employees' physical and mental health conditions. Through the use of Assessments of Capacity and other services, Gallagher enables employers to meet their obligations.

Employers can request Gallagher to conduct Assessments of Capacity for employees with workers compensation claims and/or employees showing early warning signs of physical and/or mental health conditions that do not have workers compensation claims.

Our approach to Assessments of Capacity includes:

• In-depth assessment by our qualified Occupational Therapists
• Consultation with staff and line managers
• Assessing the psychological state and capabilities of workers
• Assessing the physical capacity of workers
• Clearly outlining workers' capabilities during assessments
• Comment on workers' overall functional capacity based on their physical and mental health
• Providing clear recommendations and actions for assisting a worker to safely return or stay at work
• Documenting a comprehensive, supportive and strategic return to work plan or care plan

Assessments of Capacity can be conducted within 24-48 hours of notification. This provides the employee fast support and the employer better control. Utilised with our advanced early intervention process, 90% of cases typically do not result in workers compensation claims resulting in savings in workers compensation premiums and offering better outcomes for employees.

Our approach to Assessments of Capacity has significant benefits for the employee. In addition to taking a preventative approach to protect employees, engaging in regular and meaningful work based routine is a positive factor in achieving the overall balance required for good mental health and to aid recovery from physical injury.

Ergonomic Assessments are used to ensure that the work environment is suitable in order to prevent injuries or exacerbation of pre-existing conditions.

Poorly set up workspaces place employees at risk and leave employers exposed to workers compensation claims.

Continued exposure to poorly set up workspaces and the misuse of computers, tools and furniture can result in musculoskeletal disorders, eye strain and other issues for employees.

We provide Ergonomic Assessments to ensure that workspaces are comfortable, practical, productive and ergonomically safe.

We utilise Ergonomic Assessments to:

• Facilitate a person's functional recovery from an injury
• Prevent further injury or exacerbation of pre-existing conditions
• Protect employees from injury and organisations from workers compensation claims
• Improve productivity and employee wellbeing

In order to optimise the workspace, our approach to Ergonomic Assessments includes:

• In-depth assessment by our qualified Occupational Therapists
• Consultation with staff, management, and key stakeholders
• Ergonomic audit of the current work environment
• Proactive identification of people at risk of injury
• Application of Australian Building Standards and proven best practice
• Actionable report of findings and prevention measures to be applied
• Sta. training and self-managed behavioural change programs

Our Ergonomic Assessments provide an effective and efficient process to ensure that workspaces meet the requirements of WorkSafe and organisations meet their OH&S obligations under the Occupational Health and Safety Act.

Our approach can be used to address concerns that a specific employee raises about their work environment or to complete ergonomic assessments across the entire organisation.

Employees who are comfortable and ergonomically supported within their workstation are more productive and less likely to experience absenteeism.

Worksite Assessments are used to assist us in facilitating employees return to work following a workers compensation claim.

We provide specialised on-site assessments of both employees pre-injury duties and consideration of potential suitable duties and broader environmental and role specific assessments of high risk and problematic work departments.

Worksite assessments are designed to identify the critical demands of the work tasks, including physical, psychological, and cognitive demands.

Employers can directly engage our Occupational Therapists to conduct Worksite Assessments with their employees for workers compensation and non-workers compensation matters.

Our approach to Worksite Assessments includes:

• In-depth assessment by our qualified Occupational Therapists
• Consultation with employees, management, and key stakeholders
• Assessment of the worksite and employees' duties
• Ergonomic audit of the current work environment
• Identification of the critical demands of work tasks
• Proactive identification of people at risk of injury
• Application of Australian Building Standards and proven best practice
• Actionable report of findings and prevention measures to be applied
• Staff training and self-managed behavioural change programs

Our Worksite Assessments follow a proven process and are conducted in line with the requirements of WorkSafe to ensure that employers meet their legal obligations and enable the effective management of claims.

Our approach means that Worksite Assessments are an effective tool for both non-workers compensation matters to aid in effective workforce management as well as in their primary application to manage workers compensation claims.

We ensure that we provide a positive framework to assist in facilitating employees return to work and to prevent further injuries or exacerbation of pre-existing conditions.