Workers’ compensation has become a major contributor 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.
But business owners are not as helpless as they may feel when it comes to controlling workers’ compensation insurance costs. 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 security program
A formal safety program will qualify your business for a discount on workers̵7; 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 risks. 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 affects the employer with both direct and indirect costs. Direct costs include medical and compensation benefits, premium increases, and wages or overtime for compensation workers. Indirect costs include time spent on crisis management, retraining replacements, reduced production and lower morale.
A formal return-to-work program allows the employer to reduce workers’ compensation benefit payments and obtain production from injured employees, even when they have medical restrictions. Employers using a return-to-work program can also benefit from significant additional credit on the value of a claim.
Use in-network medical providers
Using in-network medical providers can result in significant savings on the cost of medical treatment compared to out-of-network providers. Maintain a directory, by specialty, of all workers’ compensation providers and direct treatment to providers to help you control costs.
Complete the annual review of modification of modification of workers’ compensation experiences
A large percentage of workers’ compensation Experience Mod Rates (EMRs) contain errors. Ensuring the accuracy of the EMR is critical, as it has a direct impact on your workers’ compensation insurance premiums. Errors are a common occurrence in class codes, claim status, claim codes, claim values and wages.
Choose the right grading plan
There are many workers’ compensation plans, many of which reward employers for minimizing claims and maintaining a culture of safety. Participating in risk-sharing plans, such as deductibles and retrospectives, can provide the best payoff for good performance. These plans often include cash flow incentives in premium and claims payments.
Make sure you get value for your premium commission
Agent commissions on workers’ compensation insurance can range from 5% to 15% of premiums. In proportion to the amount of commission, insurance agents can provide a variety of services in addition to placing the insurance, including collateral and loss control services, claims evaluations, Experience Mod Audits and statistical analysis of claims. When you work with an experienced agency, you never have to pay a third party to provide what is covered by your premium commission.