Having workers' compensation coverage is extremely important for employers, especially those in industries where employees are at a daily risk for injury. Every employer wants to improve their safety program and reduce incidents. For new employers, the cost of workers compensation coverage can be staggering to say the least and this often unplanned cost can be a major setback to the business.
Here are six tips to help you, the employer, keep your workers' compensation costs under control.
Establish an Effective Safety Program
By having an effective safety program, you can reduce your workers' compensation exposure. A large part of how much is paid for workers compensation is based upon frequency of injury. Your premiums can be reduced by implementing an effective safety program. One person within your business should be appointed safety manager and have the responsibility of implementing and monitoring your safety program. There are safety programs available through Arbill that can help you comply with OSHA regulations. You can also request your worker compensation carrier to provide a safety consultant to help you implement safety programs. Remember, most on-the-job injuries are preventable when employees are provided with proper protection and safety education.
Know Your State's Coverage Requirements
Workers compensation coverage is mandated and controlled by the state in which you conduct business. In this case, it is important to review your state's workers compensation regulations to find out the coverage requirements. Finding an agent that is experienced with the workers compensation regulations in your area will be a great asset to your business. This agent will be able to help you work out any payment plans with a reputable insurance company and help you budget your monthly expenses.
Ensure Job Descriptions Are Correct
Your business will be classified based on the type of work being done by employees. In many cases, your business may fall into more than one classification. Contracting jobs often have multiple classifications, for example. There are about 700 workers compensation classifications. The Governing classification is considered to be the most widely reaching out of all those available. It applies to most businesses and may best represent your business. Be sure that your agent reviews your job descriptions and that you are comfortable with the way your agent has classified your business. If you think there is an issue, ask for justification in writing.
Project Your Payroll Accurately
Your insurance premium is based on payroll times the rate per 100 for the job classification you are assigned. Projecting your payroll as accurately as possible is important because it is the exposure basis on your workers compensation policy. You should also know that the payroll projection is for a 12 month period from when you begin your policy. The payroll projection that you provide to your agent will be used to set up your policy and calculate your deposit premium.
Keep an Eye on Your Payroll
As an employer, you must keep an eye on your payroll throughout the year. If you were to find out half way through your policy that your payroll is exceeding your original projection, you need to contact your agent and have them adjust your payroll exposure. By monitoring this, you should be able to avoid a compensation audit at the end of your policy.
Review Your Workers' Comp Audit
There are often hidden fees and unknown payments that can hurt your bottom line. Employers lose thousands of dollars each year due to mistakes made by insurance companies. You should be reviewing your workers' compensation audits and premium calculations. Most employers are unfamiliar with the complicated calculations that produce their total workers compensation cost. All aspects of your workers compensation should be reviewed annually. If you need help reviewing this, you can seek out an independent professional workers compensation audit consulting firm.
These tips have been proven to help reduce costs and keep businesses in the know when it comes to their workers' compensation policy. The most important things to remember are that on-the-job injuries are preventable and workers' compensation premiums do not have fixed prices. The policies will not be determined until after the audit is complete.
To learn more about how you can reduce your workers' comp costs join us on Friday October 7th for a free event where leading attorney Matthew Wynn will offer his advice on how to reduce costs and limit exposure to workers' comp claims.