Town Looks to Lower $2 Million Insurance Costs

Southampton Town’s insurance advisers said the municipality took the right step in trying to lower a nearly $2 million workers’ compensation premium by implementing a return-to-work program.

But, the town could always do more.

Supervisors could better retrain employees who were out on disability, preventing further injury, or post warning signs in workplace areas where many slips and falls are reported, said Tom Terry, the commercial lines manager for the town’s insurance broker, Maran Corporate Risk Associates. In May, the Southampton Town Board approved a transitional duty policy and program, which allows employees who got hurt on-the-job to be given assignments that do not exacerbate their injuries.

Now, the town is going over insurance policies and getting new quotes in anticipation of the 2012 budget. All insurances other than workers’ compensation were given a renewal date of October 15, Terry said. The prices on those policies dipped 6.5 percent to $620,037 from $624,311, according to a presentation given at the town board’s work session Friday.

The town’s current workers’ compensation insurance ends January 1, and the town is looking for cheaper options.

“What we’re suggesting and want to help them do, is to use that as well as other risk management techniques to try to lower the cost of the workers’ comp,” Terry said.

The town police department filed the greatest number of claims from 2005 to 2010, according to Maran’s presentation. Over a five-year period, the town incurred $4.6 million in claims costs from the department.

The town highway department followed the police, with total claims over the five-year period at $837,411, according to a copy of the PowerPoint presentation.

In addition to employee retraining and identifying and remedying dangerous workplace locations, the town can be more vigilant recording and investigating accident reports, said Vernon Falkenhan, Maran’s managing partner.

The only two insurance options available to the town for workers’ compensation are its current provider, PERMA, and the New York State Municipal Workers’ Compensation Alliance, Falkenhan said.

According to the presentation, the State Insurance Fund, Chartis, Zurich and Safety National declined the town because of adverse loss ratios — a measure of losses incurred to premiums earned by insurance companies.

New state and federal laws have increased the cost of workers’ compensation, Falkenhan said. Even without the town’s claims history, many insurance companies are not willing to write new policies, or are doing so at a much slower pace, Falkenhan said.

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