Oberman Insurance Services

How to Save Money on Your Workers’ Compensation Insurance

Many business owners feel powerless to reduce their workers’ compensation costs. There is no need to feel frustrated; there is something you can do about it! Listed below are six things a business owner can implement to reduce their claim activity.

Here are some money saving tips from the California Department of Industrial Relations and the experts at the Comp Monitor:

 

1. Develop or renew your safety program

Everyone wants to work in a safe work environment but we don’t always know how to do it. In California employers are required to have an Illness Injury & Prevention Program (IIPP). Creating an IIPP doesn’t have to be expensive. The Department of Industrial Relations has an e-tool to help you develop your program or you can ask your insurance carrier. To find the e-tool go to www.dir.ca.gov/dosh/etools/09-031/index.htm There are many benefits to an effective IIPP program including improved workplace safety and health, better morale, increased productivity, and reduced costs of doing business. For your IIPP to be effective you must fully put it into practice in your workplace.

 

2. Provide employee training

Many workers’ compensation injuries come from employees using the machinery and equipment incorrectly. It’s your responsibility as the employer to train each employee on how to perform their job safely. The training should include what can happen if safeguards are not performed as outlined in the training and what the consequences are if the employee avoids using those safeguards. An example would be not using protective glasses when operating certain types of equipment.

 

3. Institute a safety incentive program

An incentive program is a great way to keep your workers compensation insurance costs down since it creates safety awareness. The incentive doesn’t have to cost the company a lot of money. It could be a pizza party at lunch if the organization goes 120 days without an injury or loss. Some companies give a half day off if the company goal is met. The bottom line is the incentive program will keep people focused on safety.

 

4. Monitor the effectiveness of your workers’ compensation experience modifier

Workers’ compensation experts often find numerous workers’ compensation modifiers to be inaccurate. There are many places where information for the formula to derive your experience modifier can be posted inaccurately. For example, claims that are closed may not be reported as closed, data reported to the NCCI may be inaccurate, or the NCCI may input data they receive from the workers’ compensation insurance carrier inaccurately. Ask your workers compensation agent if they have the ability to perform the task for you.

 

5. Establish a return-to-work program

A return-to-work program can help you contain costs. It simply means allowing workers, who are unable to perform their usual and customary job duties due to an injury or illness, to return to work in a temporary, limited, or light duty capacity while they recover. .The California Department of Industrial Relations provides employers with practical guidance on how to navigate both worker’s compensation and .disability rights laws.  https://www.dir.ca.gov/chswc/Reports/2010/HandbookRTW_2010.pdf

 

6. Educate your employees about the difference between minor injuries and reportable incidents

Accidents will happen even in the safest work environment. Small injuries like slight cuts or scrapes that can be treated with on-the-job first aid, a band aid, an office visit, and a follow up for observation do not need to be reported.

By following these simple suggestions, a company can greatly impact workers’ compensation costs. Workers’ compensation premiums can be greatly reduced with good claims experience and employees will be available to do their jobs. Another good outcome is reduced direct and indirect workers’ compensation costs which improves your bottom line.

 

Sources: Comp Monitor, Experience Modification Reconciliation, 2017; Eight Ways a Small Business Can Save on Workers Compensation, June 18, 2015; California Department of Industrial Relations