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Paramedic Systems of Wisconsin. 20 th 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.

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Paramedic systems of wisconsin

Paramedic Systems of Wisconsin

20th Annual EMS Conference


Insured uninsured costs
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
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.



Workers compensation premium
Workers’ Compensation Premium risk?

  • 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
Workers Compensation Rates risk?

  • Description: POLICE OFFICERS & DRIVERS

    • 10/01/2007  $3.12

    • 10/01/2006 $3.08

    • 10/01/2005 $3.09

    • 10/01/2004 $3.14

  • Description: FIREFIGHTERS & DRIVERS - NON-VOLUNTEER

    • 10/01/2007  $3.92

    • 10/01/2006 $4.10

    • 10/01/2005 $4.36

    • 10/01/2004 $4.64


Ambulance service companies
Ambulance Service Companies risk?

  • 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 6204-Drilling NOC.)ICE CREAM VENDORS - MOBILE & DRIVERSAUTOMOBILE TRANSPORT DRIVING CARS ON RAILCARSAUTOMOBILE TRANSPORT SINGLE OR IN TANDEMBANKS AND TRUST COS-ARMORED CAR CREWS-NOT CONTRACTSANITATION SERVICE - DRIVERSSCHOOL BUS DRIVERS (Drivers employed by school.)SEA WEED OR LAKE WEED - TRUCKING - ON LANDSOFT DRINK DISTRIBUTORS - DRIVERSTELEPHONE BOOK DELIVERYWATER SAMPLES FROM INLAND LAKESWINE OR SPIRIT MERCHANTS-DRIVERSAMBULANCE SERVICE COMPANIES: ALL EMPLOYEES & DRIVERSAUTO HAULAWAY OR DRIVEAWAY & DRIVERS: DRIVEAWAY & TANDEMFIRE EXTINGUISHER - SERVICE OR RECHARGE & DRIVERS


Ambulance service companies1
Ambulance Service Companies risk?

  • 7705 Code:Description: AMBULANCE SERVICE COMPANIES AND EMS (EMERGENCY MEDICAL SERVICE) PROVIDERS & DRIVERS


Ambulance service companies2

Code 7380 risk?

10/01/2007  $5.26

10/01/2006 $6.05

10/01/2005 $6.33

10/01/2004 $6.14

10/01/2003 $6.63

07/01/2002 $6.33

Code 7705

10/1/07 $5.26

Ambulance Service Companies


Compare ambulance service to fire
Compare Ambulance Service to Fire risk?

  • 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
Experience Mod - Example risk?

  • 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 example1
Experience Mod - Example risk?

  • 1.00 - break even

  • 1.20 - $1.20 per $1.00 in insurance

  • .80 - $ .80 per $1.00 in insurance


Experience mod example2
Experience Mod risk? 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
Accident Costs - continued risk?

  • Direct Costs:

    • Medical

    • Lost wages – when covered by WC

    • Permanent partial disability

    • Total disability


Accident costs continued1

Indirect Costs: risk?

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 - continued


Accident costs
Accident Costs risk?

  • 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
Cost of a Vehicle Accident risk?Example #1

  • Medical payments $ 400

  • Wage payments ($20/hr - 1 wk) $ 800

  • Third party liability $ 3,500

  • Property damage $ 1,000

  • Supervisor’s time ($30/hr - 5 hrs) $ 150

  • Personnel's time ($25/hr - 5 hrs) $ 125

  • Overtime (1 wk ) $ 400

  • Total cost$ 6,375

    Direct WC costs$ 1,200

    Indirectcosts $ 5,175

    Ratio 5.3 to1


Cost of an accident example 2
Cost of an Accident risk?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
Accident Costs for a Vehicle Accident risk?

  • Third Party Liability

  • Auto Physical Damage

  • Workers Compensation

  • Hidden Costs


Cost of a vehicle accident
Cost of a Vehicle Accident risk?

  • 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?


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