Hello everyone! I’m Jeremy from Ochsner Insurance, and today I want to share some effective strategies to help you reduce your workers’ compensation premiums through proactive risk management. By taking the right steps, you can not only save money but also create a safer workplace for your employees.
Understanding the Impact of Claims
One of the most critical factors influencing your workers’ compensation rates is your claims history. When claims occur frequently or involve significant costs, your premiums can skyrocket. For instance, if you incur indemnity payments (compensation for lost wages) beyond seven days in most states, you may face elevated rates for the next three to four years. This makes it crucial to implement strategies that minimize claims and enhance workplace safety.
1. Promote Health and Wellness
Investing in your employees’ health can lead to significant savings on workers’ compensation. Consider collaborating with a local gym to offer discounts or bringing in a nutritionist to educate your team about healthy eating habits and hydration. A healthy workforce is less prone to injuries and illnesses, which can ultimately lower your insurance costs.
2. Implement a Safety Program
A robust safety program is essential for reducing workplace incidents. Here are key components to consider:
- Training and Tracking: Regular safety training is crucial, but tracking that training is equally important. Maintain records to demonstrate to your insurance underwriter that you are actively training your employees. Common training topics include ladder safety, fleet safety, and machine guarding.
- Regular Risk Assessments: Conduct frequent assessments of your workplace to identify potential hazards. If you operate in a high-risk industry, consider hiring a professional to evaluate your processes and recommend improvements.
3. Develop a Return-to-Work Program
Having a structured return-to-work program can significantly reduce the impact of injuries on your business. Ensure that this program is documented in your employee handbook and that your team is familiar with it. Light-duty assignments can help injured employees return to work sooner, minimizing the costs associated with long-term disability claims.
4. Work with an Experienced Broker
Your insurance broker plays a vital role in managing your workers’ compensation costs. Ensure that your broker isn’t just placing insurance but is actively helping you implement risk management tools and strategies. A good broker will work with you to keep your claims history clean and provide ongoing support.
5. Maintain a Clean Claims History
Your experience modification rating (EMR) reflects your business’s safety record and directly affects your premiums. Here’s how to manage it:
- Understand Expected vs. Actual Claims: Your EMR is determined by comparing your actual claims to the expected claims for your industry. If your claims align with expectations, your EMR remains stable. However, if you exceed those expectations, your rates will increase.
- Ongoing Evaluation: Continuously assess your risk management practices and adjust them as your business grows. A proactive approach will help you maintain a clean claims history.
Conclusion
By focusing on health and wellness, implementing effective safety programs, developing return-to-work strategies, collaborating with knowledgeable brokers, and maintaining a clean claims history, you can significantly reduce your workers’ compensation costs.
If you have any questions about these strategies or need assistance in implementing them, feel free to give us a call at 775-261-1633. Our risk management advisors are here to help you create a safer workplace and achieve your business goals.
Thank you for reading, and here’s to your success!