It’s time to plan your workman’s comp strategy

Faced with the financial stresses associated with COVID-19’s impact on the workforce, employers across Central Pennsylvania should be searching for ways to boost their bottom line. 

For employers of all sizes, but especially those with sizeable workforces in the manufacturing, logistics, staffing, and grocery retail sectors, workers’ compensation claims exposure and reserving directly impacts net profits. 

With COVID-19 applying pressure to profit margins, now is an ideal time to evaluate strategy in handling claims, focusing on methods primarily designed to promote cost-containment. Such goals can be accomplished by partnering with counsel and employing strategy, litigation plans and litigation mitigation, not only aimed at promoting the best litigation results, but primarily tailored to your company’s specific needs and business interests. This means working with an attorney who functions not only as a litigator, but also an extension of your risk management team. 

To save costs associated with workers’ compensation claims, including exposure relating to indemnity and medical benefits as well as litigation and legal costs, your risk management team, with the inclusion of your counsel, must analyze claims for closure solutions at all stages of the claim.

With your risk management team and advice of counsel, recognizing patterns and trends associated with the specific facts of a case should allow you to predict outcomes and assess exposure in the very early stages of litigation. Enacting a business-focused, cost-containment approach to litigation requires an emphasis on solutions, rather than focusing solely on problems – a pitfall that can lead to lengthy litigation, long-term claims, and high costs.

For claims that enter litigation, resolution in addition to litigation options should be discussed from the beginning of proceedings. Once certain factors can be assessed, such as available defenses, quality of fact witnesses, effectiveness of medical experts, the role of the presiding judge, and the influence of claimant’s counsel (or lack thereof) on their client, exposure can be quantified and claims can be brought to cost-effective conclusions.

Taking a business-based approach proves to be a team effort requiring input and analysis from the adjuster, risk manager, counsel, and employees who may have factual information relating to the claim.

All members of the team must work in a cohesive manner in order to facilitate the best results. Adjusters, risk managers, and employees work alongside counsel to gather facts and formulate strategies to resolve claims in an efficient manner. This is important when claims are often reserved for twice the estimated value.

The team should coordinate and focus strategy in such a way to promote movement of the reserved funds from the liability to asset category. By working together to effectuate prompt conclusions to claims, often the team can achieve resolutions well under the reserved amount, allowing remaining funds to be put back into use by the business. 

With the pressures placed upon businesses in the current COVID-19 environment, Central Pennsylvania employers should assess how effective, business-based management of workers’ compensation claims can improve profit margins. Not every claim needs to be a long fought expensive ordeal when cost-effective solutions can be analyzed from the onset of litigation and even before. To employ such efforts, treat counsel as part of your risk management team via a collaborative approach to handle your workers’ compensation claims. 

Lucas J. Csovelak is an attorney at Weber Gallagher in Harrisburg. He can be reached at 
[email protected]