As if U.S. businesses didn’t have enough to worry about already, they now face a potential looming crisis as respects to rising workers’ compensation costs.
The COVID-19 pandemic has had a profound impact on U.S. workers as evidenced by record unemployment levels and a rapid shift to stay at or work from home. As states begin to reopen, it is tempting to think that the worst may be over. Unfortunately, significant uncertainty remains around the long-term effects for organizations, including potential for a second cycle of infections and when/if employees can return to work safely. As a result, the virus will continue to challenge employers and insurers with regard to workers’ compensation.
Workers’ compensation typically presents a significant liability for employers, and COVID-19 will exacerbate the risk. It is important to understand the potential challenges and develop appropriate mitigation strategies to address them. Lockton can apply important actuarial insights to help employers understand how these actions may impact current period accruals, projected loss estimates, collateral requirements and premium. Careful attention to seemingly small details can often lead to critical savings during a period of intense budget pressure.
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