Category Archives: Workers Compensation

Auto Insurance, Homeowners Insurance, Insurers and the Economy, Market Conditions, Workers Compensation

NCIGF Moves Ahead
to Support Insurers

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By Max Dorfman, Research Writer, Triple-I

For the last 35 years, the National Conference of Insurance Guaranty Funds (NCIGF) – an organization dedicated to serving 55 property/casualty state guaranty funds – has provided operational support; communications, education, and outreach; as well as public policy management for these organizations.

State guaranty funds make up a privately funded, nonprofit state-based national system that pays covered claims up to a state’s legally allowable limits, protecting policyholders if their insurer becomes insolvent. There are 55 such funds because some states have more than one.

“All states have a property/casualty guaranty association, and some have a workers compensation guaranty association,” NCIGF President and CEO Roger Schmelzer explained in a recent “Executive Exchange” with Triple-I CEO Sean Kevelighan.

“We’re not claims payers,” Schmelzer said, “We try to do things for our members that they wouldn’t be doing for themselves or that it’s better to be doing in one place.”

For nearly five decades, the guaranty fund system has paid out more than $35 billion to cover claims against about 600 insolvencies.

“Through the years, the system has successfully met every challenge that’s come its way, and has been instrumental in supporting the insurance promise,” Schmelzer said.

NCIGF recently announced its updated organizational strategy, which focuses on:

  • Pre-liquidation planning with regulators and receivers,
  • Understanding and preparing for the changing landscape in insolvencies, and
  • Seeking shared solutions to common problems among state associations.

“We want to understand better the trends and factors that could lead to insolvency,” Schmelzer said. “Then we want to do everything we can with our members, working through our educational arm, to make sure members are prepared for whatever those trends might bring.”

Business Insurance, Insurers and the Economy, Market Conditions, Risk Management, Workers Compensation

NCCI Event Shines a Light on Workers Comp

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William Nibbelin, Senior Research Actuary, Triple-I

The recent National Council on Compensation Insurance (NCCI) Annual Insights Symposium (AIS) in Orlando, Fla., provided important context and clarity around the state of the workers compensation line of business. As a new senior research actuary for Triple-I, my prior knowledge of this line could best be summarized by the following words from one peer-reviewed study of a reserving project I conducted more than two decades ago: Long-tail, unprofitable.

I recently assumed responsibility for forecast modeling of the property/casualty industry, which includes workers comp. In this role, I’d seen the line’s 2023 net combined ratio at 87 – the lowest (ie., most profitable) in the past five years. But I did not yet have deep understanding of the underlying trends driving these numbers.

I saw the AIS as an opportunity to gain that knowledge, and the event delivered.

The net combined ratio of 87 – as reported by Triple-I using National Association of Insurance Commissioners (NAIC) data sourced by S&P Global Market Intelligence – was also the ninth straight calendar year in a row under 100. According to NCCI, the success of the workers comp line in recent years represents the convergence of three factors:

  • Payroll increases
  • Moderate severity increases, and
  • Larger-than-expected frequency declines.

 “The overall numbers for workers compensation show a financially healthy system,” said Donna Glenn, NCCI’s chief actuary.

Payroll increases

The line’s 2023 direct written premium (DWP) increased 2.6 percent nationally – due primarily to another strong year of payroll growth at 6.2 percent, according to NCCI.Rising wages contributed the most to that figure, with increases in all industry sectors resulting in a combined wage growth of 3.9 percent.  Improved job creation contributed 2.3 percent, with all sectors except transportation and warehousing seeing increased employment. Payroll growth was partially offset by state-approved premium rate decreases.

Moderate severity increases

Claim severity remains moderate year over year, at 3 percent in 2023, despite indemnity claim severity at 5 percent. Medical claim severity for 2023 trended at a low 2 percent, in line with the 20-year trend of 1.8 percent and below the 3.5 percent in 2022. Medical claims less than $500,000 increased 5 percent; however, claims above $500,000 decreased 16 percent, driven primarily by several large losses in 2022.

Also, more states have adopted physician medical fee schedules from 2012 to 2022, which has shifted medical cost category shares from more expensive inpatient claims to outpatient claims, as well as lower drug claims. Outpatient claims increased from 23 percent of all claims to 27 percent and drug claims decreased from 12 percent to 7 percent of all claims.

Larger-than-expected frequency declines

Overall claim frequency decreased 8 percent in 2023, compared to the 20-year average decrease of 3.4 percent. Workers compensation claims frequency has only increased twice in the past 20 years – once in 2010 from the destabilization in the construction sector in 2009 and again in 2021 from COVID-19 impacts in 2020.

From 2015 to 2022, workers comp claims frequency benefited from workplace safety improvements and technology advances, which helped the decline in all cause of injury categories, including the two largest shares of strain and slip/falls. During this same period, the largest decline in claim frequency by part of the body was in lower-back claims. Finally, the recent slowing employment market churn has also improved claim frequency as claims decline when job tenure rises.

Stephen Cooper, senior economist at NCCI, speaking on the state of the economy and its impact on workers comp, said job growth and steadily increasing wage rates continue to favor the workers compensation system. He also gave an overview of the contribution to labor force by age and generation from 1980 to 2030, including changes in claim share from 2020 actuals to 2030 forecasts. Overall, the double-digit growth in labor force of 24 percent in 2000 over 1980 and 18 percent in 2020 over 2000 is expected to fall to only 4 percent in 2030 over 2020.

The only age group with an expected increasing contribution to the labor force from 2020 to 2030 are those age 65 and older. The contribution to labor force for the age group 16 to 24 is expected to remain flat from 2020 to 2030 however their representative share of Workers Compensation claims has the largest expected increase from 9% to 11 percent.

Beyond the numbers

 The symposium provided valuable insight into several factors affecting workers comp, including the role of AI and innovation in workplace safety technology. In a panel moderated by Damian England, NCCI’s executive director of affiliate services, the audience got to see a demonstration of AI camera monitoring of warehouse employee activity and the use of wearable technology to highlight improper lifting techniques.

“It is clear that safety technologies will be a vital part of future safety initiatives,” England said. “They may even be a gamechanger for evaluating and improving workplaces and reducing injuries.”

AIS also touched on challenges facing today’s workers, from climate to mental health.

“Our new NCCI research shows worker injuries increase by as much as 10 percent on very hot days, as well as on wet and freezing days, compared to mild weather,” said Patrick Coate, NCCI senior economist. “High temperatures impact construction and other outdoor workers most, while cold and wet weather leads to a lot more slip and fall injuries.”

Anae Myers, assistant actuary at NCCI, focused on the difference between claims that include mental health diagnosis versus those that do not.

“New research from NCCI shows that claims exceeding $500,000 are 12 times more likely to be diagnosed with an associated mental condition during the course of treatment, underscoring the potential for the impact of mental health in large claims,” Myers said.

I left the conference with a better understanding of workers comp rate making and the indices to track for future forecasts. Many thanks to Cristine Pike and Madison White at NCCI for their hospitality and guidance, as well as to all the attendees who patiently provided their expertise and generously offered their support when I introduced myself to them and to this stunning line of insurance.

Workers Compensation

National Workers’ Comp Adjuster Day: Unsung Heroes Who Improve People’s Lives

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By Loretta Worters, Vice President, Media Relations, Triple-I

When Victoria Aumiller, AIC, WCP, claims specialist, Chesapeake Employers Insurance came to the organization 14 years ago, she didn’t realize how meaningful her job would be.  Like many of her peers, Aumiller appreciates being able to make a direct impact to assist workers and their families.

Victoria Aumiller, Chesapeake Employers Insurance       

“Being injured is painful for the worker and scary for the family,” she said, adding, “it’s very fulfilling to make the experience less frightening and to help the worker navigate the medical and claims process.”

National Workers’ Comp Adjuster Day, observed on August 17, commemorates the work of Aumiller and those who have made a significant impact on the quality of life of people with disabilities and their families.

“Their job is incredibly valuable,” said Sheila Fortson, WCP®, director – Corporate & ESG communications, National Council on Compensation Insurance (NCCI).  “It’s a day of celebration, not only for workers comp. adjusters, but also for those who appreciate and respect their profession.”                                                     

Tess Madison, claims specialist with The MEMIC Group, said it’s the variety of people that she gets to work with and interact with daily that she enjoys best about being a workers compensation adjuster. 

Tess Madison, The MEMIC Group

“We get to experience all spectrums of society and forge working relationships with injured workers, but also attorneys, medical providers, employers, and nurses. Working together for one common goal is a great aspect of the job.”

Workers compensation claims adjusters are licensed by the states in which they work. Their duties include analyzing often complex employee claims for compensation, reviewing documentation, and authorizing payments.  When workers are injured  at work or ill due to working conditions, they can apply for compensation for medical bills and lost time or the pay for missed work.  Adjusters provide a detailed analysis of each open claim, including information related to the medical, disability, legal and financial aspects, as well as an action plan for claim resolution. When a serious injury occurs, claims adjusters are dedicated to helping injured workers get the medical care needed for a successful recovery while managing costs – a stressful and challenging role.

“When you make contact with the injured worker, it’s helpful to listen to how they describe the event and their injuries,” said Aumiller.  “You can assess if there’s a layer of fear or trauma associated with their experience and how they are mentally handling the event,” she explained.  “I determine what their current medical needs are from their symptoms and then coordinate the right medical providers to address their needs. I explain the process fully, answer any of their questions and explain what they can expect.  The clarity of the process and answering those questions early on takes some of the fear out of the situation for them.”

After a work-related injury, an injured worker can feel a high level of stress, wondering how they are going to get the proper medical treatment and how they are going to support themselves and their families, noted Madison.

“Prompt response time and direction for medical care, along with communication throughout the process, can make a huge impact. Likewise, ongoing communication and updates with an employer make a difference, especially if they have limited staff and rely on a healthy workforce to keep their business running.”

Madison said being a workers comp adjuster is not only meaningful, but rewarding.

“A work-related injury is often an unexpected and difficult situation. Not a lot of people are well-versed in how the compensation system works and don’t know what to expect through the process,” she said. “Some people are living paycheck to paycheck. It is a great feeling to know that you are doing everything you can to facilitate recovery and return them to work, reassuring the injured worker throughout the process that we are here for them.”

Brooke Ray, a claims examiner with Encova Insurance, agreed.

Brooke Ray, Encova Insurance

“I communicate daily with claimants that are experiencing some of the most challenging days of their lives,” she said. “I’m fortunate I can play an active role in their recovery by facilitating timely medical treatment, offering support, and answering any questions that arise during their recovery. It’s very rewarding when a claimant acknowledges how much you care.”

“National Workers Comp Adjuster Day was created to mark the day for these unsung heroes who make important decisions that ultimately improve the quality of life of injured workers,” said Forston. “We observe this occasion to ensure they receive recognition for their commitment to the well-being of affected workers and their families. They are an amazing group of people.”

Learn More:

Economic Trends Bode Well for Workers Comp, But Emerging Issues Warrant Attention

Workers Comp: A Strong Line Rebounds From Pandemic Pressure

Workers Comp: Resilient and Relevant

Workers Compensation

Economic Trends Bode Well for Workers Comp, But Emerging Issues Warrant Attention

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Workers compensation insurance provides for the cost of medical care, rehabilitation, and wage replacement for injured workers and death benefits for the dependents of persons killed in work-related accidents. In recent years, it has been the most profitable property/casualty line of business, having experienced its sixth consecutive year of combined ratios under 90 and its ninth straight year of underwriting gains.

Combined ratio represents the difference between claims and expenses paid and premiums collected by insurers. A combined ratio below 100 represents an underwriting profit, and one above 100 represents a loss. 

While the broader industry has suffered due to replacement cost trends, the most recent Triple-I Issues Brief shows how workers compensation has benefited from a generally strong economy and, in particular, strong growth in payrolls. Private employment surpassed its pre-pandemic level early in 2022, according to the U.S. Department of Labor’s Bureau of Labor Statistics, and employment growth remains faster than pre-pandemic norms. The past two years have seen payroll growth at rates of approximately 10 percent.

“Even if the current tight labor market begins to relax,” the brief says, “the forces driving payroll growth – particularly an aging work force and reduced immigration – will likely keep upward pressure on payrolls.”

While current trends bode well for workers comp, the industry needs to recognize and be responsive to emerging issues that may affect the line going forward. The impact of the pandemic – suddenly prompting more generalized acceptance of remote work and introducing a new issue in the form of “long COVID” – is one example, but it is hardly the only one.

“In 2016, there were 14 mental-injury bills considered in state legislatures,” said Bill Donnell, president and CEO of the National Council on Compensation Insurance. “In 2023, year to date, there have been more than 75.”

These measures – aimed at addressing issues as diverse as post-traumatic care for firefighters and impacts of workplace violence on employees – illustrate how stakeholder expectations continuously shift.

Business Insurance, Business Risk, Legal Environment, Market Conditions, Workers Compensation

Group Captives Offer Cost-Sensitive Companies Opportunities to Savein Face of Inflation

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By Max Dorfman, Research Writer, Triple-I

Today’s inflationary conditions may increase interest for group captives – insurance companies owned by the organizations they insure – according to a new Triple-I Executive Brief.

Group captives recruit safety-conscious companies with better-than-average loss experience, with each member’s premium based on its own most recent five-year loss history. Additionally, the increased focus on pre-loss risk management and post-loss claims management can drive members’ premiums down even further by the second and third year of membership.

“Each owner makes a modest initial capital contribution,” states the paper, Group Captives: An Opportunity to Lower Cost of Risk. “The lines of coverage written typically are those with more predictable losses, such as workers compensation, general liability, and automobile liability and physical damage.”

With these benefits, the group captive model can help to control spiraling litigation costs. This is particularly important as attorney involvement in commercial auto claims – notably in the trucking industry – drives expensive litigation and settlement delays that inflate companies’ expenses.

Indeed, a 2020 report from the American Transportation Research Institute found that average verdicts in the U.S. trucking industry grew from approximately $2.3 million to almost $22.3 million between 2010 and 2018 – a 967 percent increase, with the potential for even higher verdicts looming.

Group captives can improve control over these costs through careful claims monitoring and review, often through providing additional layers of support that improves claims adjusting effectiveness and efficiency.

“Given that members’ premiums are derived from their own loss history, this is yet another way that they are able to lower their premiums, proactively managing and controlling the losses that do occur,” the Triple-I report mentions. “Group captives can provide a viable way to protect companies across several lines of casualty insurance. Their prominence is likely to grow as economic and litigation trends continue to increase costs.”

Most companies that join group captives are safety-conscious, despite often being entrepreneurial risk takers. “While they embrace the risk-reward trade-off, they’re not gamblers,” said Sandra Springer, SVP of Marketing for Captive Resources (CRI), a leading consultant to member-owned group captive insurance companies. 

“They are successful, financially stable, well-run companies that have confidence in their own abilities and dedication to controlling and managing risk,” Springer added. “They believe they will outperform actuarial projections, and a large percentage of them do.”

Learn More:

Backgrounder: Captives and Other Risk-Financing Options

Firm Foundation:  Captives by State

White Paper: A Comprehensive Evaluation of the Member-Owned Group Captive Option

Video: Executive Exchange: Triple-I and Captive Resources

From the Triple-I Blog:

Latest Research on Social Inflation in Commercial Auto Liability Reveals a $30 Billion Increase in Claims

How Inflation Affects P&C Rates and How It Doesn’t

Inflation Trends Shine Some Light for P&C, But Underwriting Profits Still Elude Most Lines

Monetary Policy Drives Economic Prospects; Geopolitics Limits Inflation Improvement

Health & Safety, Workers Compensation

Workers Comp:A Strong Line Rebounds From Pandemic Pressure

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Max Dorfman, Research Writer, Triple-I

The workers compensation field is “responding and adapting remarkably well to economic changes,” according to Donna Glenn, chief actuary, National Council on Compensation Insurance (NCCI). “The pandemic brought new occupational illnesses into the system, but it was offset by a reduction of other types of claims back in 2020.”

Glenn made her comments in a new Executive Exchange with Triple-I CEO Sean Kevelighan. She noted that the workers comp industry was in a strong position before the pandemic and, consequently, in its aftermath. This includes seven years of underwriting profitability.

“Strong employment and wages are on the rise, fueling the workers comp system,” Glenn said. “The strength of the labor market is awesome.”

Kevelighan and Glenn noted that changing labor patterns will also affect workers comp claims frequency.

“Frequency declined in 2020 because of the business shutdowns,” Glenn said. “When workers returned, claims activity came back. However, remote work is decreasing overall claim frequency. This is the new normal.”

They also discussed the potential for rising medical costs.

“Medical costs have been fairly stable, but some are talking about medical costs exploding out of control again,” Kevelighan said.

“Medical prices are up,” Glenn agreed, adding that medical inflation “is tame compared to general inflation. The medical industry has benefited from regulation, including medical fee schedules, treatment guidelines and prescription drug formularies, which contribute significantly to the cost-control system in workers comp.”

Further, fewer procedures are happening in hospitals.  Instead, they’re happening in an outpatient environment or ambulatory service center.

Glenn observed that physical therapy and the decrease in use of opioids has also helped. However, she signaled that there may be emerging issues with mental health.

“PTSD, particularly with first responders, comes up with workers comp,” she said. “But mental health is much broader than PTSD. We have to be very mindful of how we take care of workers.”

Business Insurance, Business Risk, Insurance Industry, Workers Compensation

Pandemic Fuels Growth in Captive Insurance

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By Max Dorfman, Research Writer

The coronavirus pandemic and the financial challenges it presents have fueled growth in captive insurance – a form of self-insurance in which one or more entities establish their own insurance company. They also may insure the risks of organizations other than their major owners. 

“Wholly owned” captives are set up by large corporations to finance or administer their risk financing needs. If such a captive insures only the risks of its parent or subsidiaries, it is called a “pure” captive.  Multiple companies may also form a “group captive.”

Captive formations nearly doubled in 2020, according to a recent survey by Marsh. The global insurance broker and risk advisor’s survey of more than 1,300 captives also shows that gross written premiums in this area grew from $54 billion in 2019 to nearly $61 billion in 2020.

 In January 2022, the National Collegiate Athletic Association (NCAA) board of governors unanimously approved a $175 million fund to create a captive for event cancellation. With insurers unable to cover risks related to the coronavirus pandemic – which falls under the umbrella of communicable diseases policies – because of the potential for unsustainable costs, the captive structure has become a more popular method to protect from losses.

The NCAA formed its captive after the 2020 NCAA basketball tournament was cancelled due to COVID-19, resulting in a $270 million payout – or about 40 percent of what the 1,200 participating schools would have earned for the tournament. In 2021, the NCAA limited the number of fans at the tournament, with the organization’s coverage allowing it to pay the total $613 million to members last year. However, their coverage for 2022 had expired, and communicable disease coverage was now difficult to find.

“When the NCAA looked to renew coverage for the 2022 tournament, a lot of it was going to look similar,” said John Beam, a broker for Willis Towers Watson, “but there is not coverage for communicable disease right now.”

The sports and entertainment industry experienced losses between $6 billion and $10 billion as the coronavirus pandemic raged on, with premiums in event insurance increasing between 25 percent and 50 percent. For many organizations, captive insurance provides a viable alternative for these risks.

Workers’ comp and captives

The coronavirus pandemic has also affected captive owners in the workers’ compensation field. Indeed, the pandemic, alongside the ensuing “Great Resignation,” during which employers have struggled to retain staff, has made many captive owners potentially more willing to pay workers’ comp claims, according to a panel at the recently held Captive Insurance Companies Association international conference.

Amy O’Brien, vice president of third-party administer sales at Gallagher Bassett Services Inc., a claims service provider, said the initial phases of the pandemic saw many insurers denying COVID-19-related claims. Claims asserting exposure at work were difficult to prove, and many captives questioned if the claims were associated with claimants’ work. Additionally, there were possible regulatory changes that these captives were concerned about.

“With medical costs continuing to rise, the most significant dynamic in terms of any company controlling their workers’ compensation costs and claims is ensuring that there are adequate tools in place to help mitigate medical costs for claimants under their workers’ compensation,” said Dustin Partlow, senior vice president at Caitlin Morgan Insurance Services and an expert in captive insurance solutions.

“But with omicron and the Great Resignation, we’re seeing a change where employers are saying, ‘What can I do to get this person back to work sooner?’” Gallagher’s O’Brien said.

Approximately 90,000 claims were processed by Gallagher Bassett that covered a COVID-19 issue, with over 60 percent of cases closed without payment, frequently due to the fact that there were no related medical expenses, O’Brien said. But the 40 percent that did result in a payment averaged $4,000 per case.

“The employee is more valuable now – so they are being treated right. The employer is saying: ‘What can I do to keep this person?’,” O’Brien added.

Insurers and the Economy, Workers Compensation

Workers Comp:Resilient and Relevant

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Despite early “dire estimates” of how the COVID-19 pandemic might affect the workers compensation insurance sector, the system has proved to be resilient, according to Bill Donnell, president and CEO of the National Council on Compensation Insurance (NCCI).

Triple-I CEO Sean Kevelighan recently spoke with Donnell about a range of workers comp topics, starting with how the line has managed to buck the hard-market trend affecting much of the rest of the industry. Workers comp plays a critical role in the U.S. economy and is the second-largest line of commercial insurance, with $42 billion in premium annually. As part of its mission to foster a healthy workers compensation system, NCCI gathers data, analyzes industry trends, and provides objective insurance rate and loss cost recommendations. 

While much of the rest of the property and casualty insurance sector has been marked by rising rates in recent years, Donnell said, “Workers compensation rates have been trending down, unlike others in the marketplace.”

Even with rates falling, he said, the line has seen “seven years of underwriting gains and favorable combined ratios.” Combined ratio is the most commonly cited measure of profitability for individual insurers and for the industry.

Donnell added that, in 2020, workers comp writers had $14 billion in reserves.

“It’s a resilient system,” he said.

Donnell also offered his perspective on how the nearly 100-year-old industry can stay relevant in the years ahead.

“It’s about modernizing data and analysis,” he said. “It’s about attracting the best talent, and never losing focus about why we exist, which is helping injured workers and their families. I can’t think of a more noble mission than that one.”

Auto Insurance, Business Insurance, Business Risk, Emerging Risks, Legal Environment, Regulation, Workers Compensation

Cannabis Industry Prospects Brighten;Risks, Challenges Remain

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The future looks brighter every day for the cannabis industry.

From recent findings that cannabis components may lead to treatment or even prevention of coronavirus infection in lung cells to yesterday’s vote by the House of Representatives in favor of the Safe Banking Act, barricades to full legalization just keep falling.

This isn’t the first time the act – which would protect banks from federal penalties for doing business with cannabis-related businesses that comply with state laws – has made it through the House. It was first introduced in March 2019, and the House has approved it three times, only to have the Senate Banking Committee block its progress. But with the current Democrat majority, apparent bipartisan support, and growing public and state-government support for cannabis legalization, the fourth time just might be the charm.

Similar federal “safe harbor” legislation for the insurance industry – the Clarifying Law Around Insurance of Marijuana Act (CLAIM Act) – was introduced last month.

“More optimism”

The Drug Enforcement Agency characterizes cannabis as a Schedule I drug, defined as having “no currently accepted medical use and a high potential for abuse.” Without legislative change, banks and insurers can’t do business with business without risking running afoul of federal drug laws.

“There’s more optimism now and an assumption that they’re going to work to pass some of these bills that have been in motion for a while now, but never hit the point of actually moving forward,” said Max Meade, cannabis insurance advisor at Brown & Brown Insurance. “I’m also seeing more conversations around working to bundle some of these bills that they’ve been talking about and do a larger cannabis reform.”

As states continue to decriminalize marijuana to different degrees, one of the biggest issues facing cannabis businesses is the 280E federal tax burden, which means cannabis businesses can’t expense the normal cost of goods or anything a normal business can during the course of operation, from utilities to payroll and rent. This means marijuana businesses often pay federal income tax rates in the 65–75 percent range, compared to 15-30 percent  for other businesses. They are taxed on their gross revenues, unlike all regular businesses, which pay tax only on income after their expenses.

The Small Business Tax Equity Act would provide an exception into the Internal Revenue Code to let cannabis operators – as long as they’re in compliance with state laws – make the same deductions as any other business.

Easier to operate

Passage of these laws would make it easier for cannabis-related businesses to operate. The CLAIM Act would let these businesses obtain insurance to cover the same risks of theft, damage, injury, loss, and liability as all other businesses.  

“There are upwards of 30 surplus lines carriers and several managing general underwriters that currently service the cannabis industry across many lines of coverage,” the National Law Review reports. “There also is a small handful of admitted carriers that operate in California, and most recently in Arizona.”

While market capacity for property, commercial general liability, product liability and workers’ compensation coverage has expanded – these policies remain more expensive than the same coverage purchased by similar companies in other industries. Passage of the CLAIM Act would open the doors for more insurers and should bring the cost of insuring marijuana-related businesses much less expensive.

THC persistence a challenge

But challenges will remain – particularly with respect to the workplace. When marijuana was illegal under both state and federal law, employers would typically prohibit employees or employment candidates from using marijuana off-duty as a condition of employment. But as states have begun to permit medical marijuana, things have gotten a bit hazier.

No state requires companies to accommodate on-duty marijuana use. As with recreational marijuana, no state that permits medical marijuana requires employers to accommodate on-duty marijuana use, possession, or impairment. States will often explicitly state that medical marijuana laws don’t affect an employer’s drug-free workplace policy.

Does workers compensation cover a workplace accident in which the injured employee tested positive for marijuana? Persistence of THC – the main psychoactive compound in marijuana – complicates this question, and state courts have differed on this issue, depending on the individual details of each case.

THC persistence also complicates issues around impaired driving.

Auto Insurance, Highway Safety, Workers Compensation

Distracted driving during the pandemic

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Getty Images

Activities that take drivers’ attention off the road, including talking or texting on mobile devices, eating, and talking with passengers, are a major safety threat.

During the pandemic, while overall driving decreased, unsafe behavior by drivers rose in an alarming way. Motor vehicle deaths were up 8 percent in 2020 from the prior year – the highest percentage increase in 13 years, according to the National Safety Council.

Perhaps unaware of the danger, one in four drivers thinks roads are safer today than they were before the pandemic, yet a growing number of people reported using their mobile devices in unsafe ways while driving, according to the 2021 Travelers Risk Index on distracted driving.

The study found increases in the following behaviors:

  • Texting or emailing (26 percent, up from 19 percent pre-pandemic).
  • Checking social media (20 percent, up from 13 percent pre-pandemic).
  • Taking videos and pictures (19 percent, up from 10 percent pre-pandemic).
  • Shopping online (17 percent, up from 8 percent pre-pandemic).

“Traffic volumes were lower during the early days of the pandemic, which may have given drivers a false sense of security,” said Chris Hayes, Second Vice President of Workers Compensation and Transportation, Risk Control, at Travelers. “Not only did distracted driving increase, data from our telematics product IntelliDrive shows that speeding also became more prevalent. As travel restrictions are lifted around the country, it’s critical to slow down and stay focused on the road by eliminating distractions.”

Travelers’ findings suggest that many people may be feeling increased pressure to always be available for their jobs. This year, 48 percent of business managers said they expect employees to respond frequently to work-related calls, texts or emails, compared to 43 percent pre-pandemic. One in four respondents said they answer work-related calls and texts while behind the wheel, citing the following reasons:

  • 46 percent said they think it might be an emergency.
  • 29 percent said their supervisor would be upset if they don’t answer.
  • 22 percent said they are unable to mentally shut off from work.

Yet, a higher number of employers are concerned about liability from distracted driving. More than one-quarter (27 percent) indicated that they worry a great deal about their liability should an employee be involved in a crash because of distracted driving, up from 21 percent pre-pandemic.

April is Distracted Driving Awareness Month. Here are a few resources to help reduce preventable crashes and keep everyone safe on the road:

Travelers Distracted Driving Prevention Materials
National Safety Council
National Highway Traffic Safety Administration
OSHA Guidelines for Employers to Reduce Motor Vehicle Crashes