Whether you employ hundreds of laborers in a high-risk industry like oil and gas or construction, or a handful of employees in an office setting, workers’ compensation is must-have coverage. Workers’ compensation insurance keeps your employees safe from financial damage following a work-related injury, and it can keep you out of court for employee injury-related lawsuits.
Despite its benefits, workers’ compensation insurance may feel like a burden if you’re facing unexpected premium hikes each year. However, you shouldn’t feel like you need to change your limits or look for a new policy to reduce your workers’ compensation costs. Here are five steps you can take to help prevent claims and bring down your premium.
Insurance carriers determine your workers’ compensation premiums by classifying your employees into payroll categories known as class codes. Insurers generally charge you a specified rate per every $100 of payroll. High-risk employees, such as roofers or construction laborers, have a higher rate than office workers. Therefore, you’ll inherently pay more for workers’ compensation insurance if you own a business in an industry where a workplace injury is more likely to occur.
Just because you own a business in a high-risk industry doesn’t mean you’re out of luck when it comes to reducing workers’ compensation costs. Another factor that insurance companies use to determine your premium is your experience modifier, which compares your actual losses and claim costs to your expected costs over time. If you file fewer claims and/or less costly claims than expected, your experience modifier may provide a credit to your policy. The lower your experience modifier, the bigger the credit.
How do you reduce your experience modifier and lower your premium? You need to minimize the number and cost of your losses. Here are five steps you can take to mitigate workers’ compensation claims.
To create an effective safety training program, you should start by consulting guidelines from the Occupational Safety and Health Administration (OSHA). OSHA regulates most private employers, requiring them to maintain safe and healthy working conditions for their employees. The agency also offers a wealth of resources to help employers get started with their new safety program.
According to OSHA, safety programs should include:
- Management commitment: Managers should set an example for safe workplace practices and communicate safety goals to employees.
- Safety procedures: Employers should create regulations for managing and mitigating workplace hazards.
- Safety training: If employees don’t know your safety procedures, they can’t put them into practice. You should provide training to ensure employees have the tools and knowledge necessary to work safely.
- Program evaluation: You should monitor and evaluate your safety program regularly to make sure it’s as effective as possible. If something isn’t working, you should adjust your procedures accordingly.
Safety programs help you keep work-related incidents to a minimum and reduce claims. Additionally, some states offer direct workers’ compensation discounts for employers with safety programs. No matter what state you’re in, implementing a safety program is the best way to manage workers’ compensation costs.
Merely creating a safety program isn’t enough to reduce workers’ compensation premiums. Once you have a program in place, you need your employees to follow your procedures during their day-to-day tasks. Safe practices should become second nature to your staff if your management team works hard to foster a safe workplace culture.
When an employee is injured at work, you report that injury to your workers’ compensation insurance carrier for them to consider payments for medical bills, rehabilitation costs, and lost wages. Reporting the injury is a necessary first step in the claim process, but it shouldn’t be your last. If you want to reduce the number of similar injuries, you need to thoroughly investigate the incident and discover the root of the problem.
During an incident investigation, you should document the accident scene to determine what occurred. Then, you should capture data related to the incident and identify the root cause. Once your investigation is over, you should take corrective actions to prevent similar injuries or illnesses in the future.
If you want employees to follow your risk management procedures and safety best practices, you need to train them. Well-educated employees are less likely to make preventable or hasty mistakes on the job, so they’re a key component in your injury and illness prevention program.
There are several ways to train your employees. You can offer in-person training courses in a traditional classroom setting, create a digital training course, or outsource virtual training through a third-party provider. At InSource, we offer several different solutions to help our customers with their safety training needs.
The workplace is constantly changing, and your safety training program should change with it. By tracking your injured workers, the cost of your workers’ compensation claims, and the types of injuries sustained, you can determine if your procedures are working. If they aren’t, you should use your data to identify areas for improvement and make changes accordingly.
Looking for an agent that does more than just provide workers’ compensation insurance? InSource can help you create a risk control program and make your company a safer place.
Workers’ compensation insurance is one of the most important coverages for businesses across all industries. It’s so critical, in fact, that most states require employers to carry workers’ compensation coverage. While workers’ compensation costs are typically reasonable for business owners in low-risk industries, employers in high-risk industries may find themselves stuck with expensive premiums that seem to get worse every year.
At InSource, our goal is to help our high-risk partners maintain a safe work environment and keep workers’ compensation premiums to a minimum, offering risk control services on top of our affordable workers’ compensation policies. If you’re not sure where to start when it comes to reducing workplace injuries, our experienced safety experts can help.
Contact us today to learn more about our comprehensive workers’ compensation coverage options and risk control programs.