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| Safety & Workers' Compensation |
| Strategies for Lowering Workers' Compensation Losses |
We’ve resigned ourselves to a lot of changes since the terrorist attacks. We’re probably more careful about accepting mail from unidentified sources. We’re accustomed to the idea of leaving knitting needles and fingernail clippers out of our carry-on baggage. We’re also learning that there will be inevitable increases in the expense of insuring ourselves and our businesses against accidents. Recent data indicates, for example, that Workers’ Compensation premiums will increase an average of 25% this year.
If you’re a small business struggling to keep up, the news is not welcome. But there are some steps you can take to insure that future price hikes don’t affect your bottom line as dramatically. If you are looking for a “quick fix,” some consultants suggest that you shop around to find a carrier who will not increase rates until later next year.
Another solution would be to utilize the services of a Professional Employer Organization (PEO). When you enroll with one of these companies, your company becomes part of the PEO’s “risk pool.” Often, the PEO enjoys a lower “experience rating” (a rating based on the frequency and severity of a company’s losses) than the individual business does.
The most effective solution, however, will be to concentrate on improving your company’s overall safety record. Megan Perry, a marketing specialist with the Workers Comp. Fund recommends that employers start by educating themselves. Your Workers’ Compensation specialist is your best resource.
Insurance carriers tabulate loss records, and your company’s safety record for the past three years affects the cost of your premiums today. A significant effort at “loss control” should substantially influence your costs down the road. Consider some of the obvious solutions like promoting a stepped-up safety program or implementing a drug testing program.
Be sure you have an employee handbook to help limit the scope of your company’s liability in the event of an accident. Create a “risk management task force,” whose focus will be to discover and eliminate potential losses. You might also consider implementing more stringent hiring procedures, including background checks and careful reference checks. “The most significant any business owner can make is a change in attitude,” says David Dyches, a Human Resources Consultant for Employer Solutions Group. Managers and owners have to understand that employee safety is a “bottom-line” issue.”
For small businesses without on-staff Human Resource expertise, experts recommend looking for help from a company willing to outsource these vital functions. Again, many PEO’s provide these services as part of their package price, or can provide them to you for a reasonable fee.
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