What Would You Do? An Interactive Quiz - Part 1

Saturday, October 11, 2003 | 0

WHAT WOULD YOU DO?

The small business is in a particularly difficult situation when it comes to workers' compensation. Not only is coverage typically limited, but the small employer does not have the resources that big business has to manage safety programs or claims when they do happen.

In this 2 part series, we will present some scenarios for your experienced consideration as a small business person, and in the next article we'll take a look at appropriate solutions to the problems.

Scenario #1 -- An employee receives a minor cut on her hand. You offer first aid at your offices, but the employee insists on seeing a doctor. You don't know of any doctors in the area; the employee says she has Kaiser coverage. You tell the employee to see her own doctor at Kaiser; later you find that Kaiser sent all the injury information to your insurance carrier, and you now have an open claim with them. This is going to negatively impact your claims history. How could you have mitigated the carrier's involvement in this claim?

Scenario #2 -- An employee sprains an ankle while working. You send him to the emergency room at a nearby hospital for treatment. He comes back with a note saying he cannot do his regular job duties, so you send him home to recuperate. The note indicates the employee should follow up with his private physician. You report the claim to the insurance carrier, who sets up a claims file and posts their standard minimum reserve of $7,000. The claims examiner never answers the phone, and has not returned your call even though you've left 3 messages. How could you have avoided the expense of a lost-time claim?

Scenario #3 -- You hire an employee who develops performance problems within 2 months of being hired; specifically, she is constantly late for work and has to leave early a few times; she also calls in sick twice. You begin to hear of problems in the employee's personal life that are causing this pattern of tardiness and absenteeism. You decide to terminate the employee at 90 days based on these issues and because of the performance problems. A week after you terminate her, you receive a letter from an attorney saying she has filed a claim against your company for disability due to job stress. You hoped your broker could give you some information on defending the claim, but there is no service representative assigned to your account-they can have someone get back to you in the next couple of days. Now what?

You are a butcher, a baker, a candlestick maker; you have a small manufacturing company, a small construction company, a service company with fewer than 100 employees. Your time and experience is precious in the operation of your company, and you need the best from each employee. But suddenly you are expected to be both a medical triage specialist and a knowledgeable claims handler! Did anyone tell you there would be days like this?

Your first thought may be to put everything on a far corner of your desk and hope it all goes away. Be forewarned--this never happens! Claims only get worse with time, and difficulties can increase exponentially when claims are ignored.

As an interactive exercise, ponder these scenarios, write your answers to each and e-mail them to me (Meg Gallagher - mmgallgher@adelphia.net). We'll compare your answers to the "correct" answers I've prepared in the second article in this series.

The author is Meg Gallagher, president and owner of MM Gallagher Company, Risk Management. She can be reached at (714) 447-9449, or by e-mail at mmgallagher@adelphia.net.