Many employers simply disregard the positive effect a safety plan has on their workers compensation program. They chalk it up to too much trouble to design, not enough time to implement and to costly to maintain. When in fact just the opposite is true. An active safety plan will lower employee injury rates and can result in lower workers compensation insurance cost. Credits may be applied to workers compensation policies for those who demonstrate an active safety plan. Employers should use the many resources at their disposal for help establishing a safety plan.
Lack of Control
Simply stated an employer who has no control over his workers compensation program will pay more in premium. Lack of control will only bring on unnecessary expense. Regardless the size of an employer, all will benefit from a workers compensation cost control program. An effective program can be very simple or very complicated. The existence of a cost control program will improve an employers bottom line. A few items that should be addressed in the most basic cost control program are;
Developing a relationship with an independent audit and premium review company;
Developing and implementing an organized Safety Plan;
Address employee training;
Address hazards in the work place;
Develop claims procedures, what to do when an employee is injured;
Conduct safety meetings.
Just a few items to get you thinking!
No Return to Work Program
Get that injured employee back to work as soon as possible! A return to work program is a program established by an employer who allows an injured employee to return to work in a light or modified work duty position until they are fully recovered and can resume their normal work duties. Remember, claims have a direct impact on the cost of workers comp insurance so everything that can be done to reduce the claim cost and get the employee back to work will have a positive impact on the employers cost. A return to work program will help an employee heal more quickly, help the injured employee retain work skills, help the employer reduce costs and maintain productivity and help reduce the claim cost thus reducing the employers experience mod factor, a factor that drives workers comp costs.
Workers Compensation as a Commodity
We see many employers purchasing workers compensation coverage just like they would buy a gallon of gasoline, from the next cheapest pump down the block! Unfortunately, sometimes they really get what they pay for! Workers compensation coverage is a complicated product and when reduced to a price only decision an employer may expose his business and future to unknown liabilities. Insurance companies do go out of business. So keep these tips in mind; work with a reputable insurance company and agent; don't be fooled by the low prices and new insurance players in a soft market; buy your workers compensation insurance from a company who knows about what you do. Lets just say cheap may not be in an employers best interest. Do the homework!
Failure to Verify Audits and Premium Calculations
Employers lose thousands and thousands of premium dollars each and every year due to mistakes and errors made by insurance companies. Unfortunately most of these mistakes and errors remain unknown to employers. Because of this, it's important that an employer verify all workers compensation audits and review all premium calculations that may be presented to them by an insurance company. It's the hidden or unknown overpayment that can hurt an employers bottom line. It is important that an employer uses an independent company who specializes in these services to verify the accuracy of audits and premium calculations. Don't let an undiscovered mistake cost your business money!
I've shown some of the most common mistakes employers make that effect their workers compensation insurance total cost. While these may appear to be very simple, their overall effect on employers both large and small can be great. So as a final thought, try and avoid the mistakes others have made and take control of your workers compensation insurance program. A little effort now will pay off in the future by improvements to your bottom line!