The choice of the insurance limit: a decision not to be left to chance

Each year, employers subject to the Commission des normes, de l’équité, de la santé et de la sécurité du travail (CNESST) retrospective rating system must choose a limit of insurance per claim from 10 possible options. This analysis process is called the “insurance limit election.” It is only mandatory for companies with a retrospective plan.

This limit is used to determine the maximum amount the employer is willing to pay for the cost of each work-related injury or illness that occurs in the following year.

Unfortunately, this exercise is often left to chance, so that many thousands of dollars can remain in the CNESST’s coffers rather than in your pockets! Therefore, it is necessary to carry out this exercise with great care, every year.

Obviously, no one can predict what injuries may occur in the future. Nevertheless, the role of a rate adjuster is to understand and master the parameters of your business to guide you towards the most appropriate choice of limits for your situation.

To make the right choice of insurance limits, several criteria must necessarily be considered, such as the analysis of your experience with occupational injuries, your level of risk tolerance, the prevention of your occupational injuries as well as the management and control of claims in your company.

In other words, the process consists of measuring your risk and seeing how you want to manage it. Once this step has been completed, it is much easier to make a thoughtful, informed, and logical choice.

Any manager who is concerned about the financial health of his or her company should remember that deciding on the choice of insurance limit is a very important step.

Because the retrospective rating system is a self-insured system, it is very reactive. Your choice can mean the difference between a refund to be obtained or an additional amount to be paid during the retrospective adjustment. This decision has a direct impact on your CNESST contributions and your cash flow!

Furthermore, it is strongly recommended that this exercise be performed annually since many parameters vary from year to year and the conclusion may be different from one year to the next. Among other things, CNESST rating experts will look at your personalized rate, insurance premiums, 150% maximum, payroll, cost sharing, etc.

MEDIAL can assist you in analyzing the best choice of insurance limit for your company and guide you in your decision making. You must confirm your 2023 limit selection with CNESST by December 15, 2022.

Contact our team to learn more about the limit selection.