Workers’ compensation has become a major contributing factor to the cost of business insurance. Premiums are high for many types of businesses, and the additional costs associated with employee injuries can be staggering.
However, business owners are not as helpless as they may feel in controlling the cost of workers’ compensation insurance. Our knowledgeable agency is available to assist with loss control in several different ways. The following strategies can effectively help you keep your workers’ compensation costs to a minimum.
Implement a Formal Safety Program
A formal safety program will qualify your company for a discount on workers’ compensation premiums. It will also help create a safety culture within your organization. A safety culture promotes teamwork, rewards results, and increases awareness of safety hazards. If you implement a Drug Free Workplace program, it can provide an additional premium credit.
Establish a Return-to-Work Program
When a work-related injury causes an employee to miss work, it impacts the employer with both direct and indirect costs. Direct costs include medical and indemnity benefits, premium increases, and wages or overtime for replacement workers. Indirect costs involve time spent on crisis management, retraining replacements, decreased production, and lower morale.
A formal return-to-work program makes it possible for the employer to reduce workers’ compensation benefits payments and gain the production of injured employees, even when they have medical restrictions. Employers that use a return-to-work program may also benefit with significant additional credit on the value of a claim.
Use Medical Providers That Are In Network
Using in-network medical providers can result in significant savings on the cost of medical treatment over out-of-network providers. Keep a directory, by specialty, of all workers’ compensation providers and direct treatment to providers who help you control costs.
Complete the Annual Workers’ Compensation Experience Mod Audit
A large percentage of workers’ compensation Experience Mod Rates (EMR) contain errors. Ensuring accuracy of the EMR is critical, as it has a direct impact on your workers’ compensation insurance premiums. Inaccuracies are a common occurrence in class codes, claim status, claim codes, claim values, and payroll.
Choose the Right Rating Plan
There are many workers’ compensation plans, many of which reward employers for minimizing claims and maintaining a safety culture. Participating in risk sharing plans, such as Deductible and Retrospective, can provide the best payoff for good performance. These plans often include cash flow incentives in premium and claims payments.
Be Sure to Get Value for Your Premium Commission
Agent commissions on workers’ compensation policies can range from 5% to 15% of the premiums. Commensurate with the amount of commission, insurance agents can provide a variety of services in addition to placing the policy, including safety and loss control services, claims reviews, Experience Mod Audits, and statistical analysis of claims. When you work with an experienced agency, you will never have to pay a third party to provide what is covered by your premium commission.