Workers compensation can be a huge line item in your business budget. Rates vary fairly significantly by state, but in 2014, the national average cost of premium per $100 of workers’ wages was $1.85. If proper measures are not in place, this budget line can skyrocket.
Does your business have these measures in place? With a few careful steps, you can reduce the amount you spend on premiums. They are:
Get injured employees back to work – The faster you can get an injured worker back to work, the lower your costs. Modified duty is an important part of this process. When an employee is injured, an evaluation should be conducted to determine what duties can be performed, if the employee can be assigned to a different area, and what modifications are required. Get the worker back to work quickly by reassigning or adapting his or her duties.
Check your classification – Hundreds of classifications exist; if even one worker is misclassified, it can increase premiums unnecessarily. Track projects and employees carefully to ensure workers and work projects are classified correctly. If your construction firm’s work actually involves 10% HVAC maintenance, don’t label your projects 100% construction. It can make a difference. And misclassification can really impact your bottom line.
Pay a deductible – In many states, employers who pay a deductible on workers compensation can reduce their premiums by as much as 25%. Deductibles typically range from $100 to $1,000. Contact your insurance professional to see if your company can benefit from this.
Check your experience rating – Employers who pay more than $5,000 per year in workers compensation premiums receive an “experience rating.” This rating reflects your claims history compared to other companies in your industry. The lower your claims, the lower your premiums. Check with your insurance advisor to ensure your experience rating is correct.
Screen employees – Check with an employee’s previous employers about his or her safety record. Don’t hire a worker who previously has shown a lack of respect for company safety measures.
Put safety first – Having top-notch safety procedures in place will keep your workers compensation costs low. Obviously, the fewer accidents and injuries, the better the premiums. Good safety practices include use of appropriate safety equipment; proper training for lifting, sitting, and other procedures needed in your business; and regular inspections for safety hazards in the layout of work areas and use of equipment. You also may want to consider drug testing, if appropriate.
Communicate the importance of safety to your workers – Conduct regular health and safety meetings to keep everyone educated on proper safety measures and carefully document all procedures to demonstrate safety measures taken.
Make injury reports a priority – If an employee is injured on the job, respond with medical attention immediately and file all necessary paperwork completely and quickly. Delays may cause further injuries, lawsuits, and fines.
A company that takes steps to ensure workers are safe and healthy will not only save on premium costs but will show a commitment to their workers safety. Win-win.