Simple Ways to Lower Your Workers’ Compensation Premiums

November 6, 2020
Engineer technician watching team of workers on high steel platform,Engineer technician Looking Up and Analyzing an Unfinished Construction Project.

For business owners, safety should always be a top priority, but no matter what industry you work in, accidents can still happen. An employee could slip and fall or become sick as a result of doing their job. Not only are workplace injuries bad for employee morale, but it’s also costly for employers. 

According to OSHA, companies paid more than one billion dollars per week in direct Workers’ Compensation costs for non-fatal, disabling injuries in one year. 

If your company does not have a strong safety record, you can expect your Workers’ Compensation premium to keep going up. However, you can take steps to mitigate the likelihood of workplace accidents, which will also help lower your premium costs. 

Take a look at these simple ways to lower your Workers’ Compensation Premiums.

Focus on Safety

On-the-job accidents can happen any time, but you can do something to prevent them or at least minimize their impact. One way is to establish a work environment that focuses on safety. To do that, you need a safety program. This includes:

  • Identifying workplace hazards that may cause accidents
  • Establishing safety practices
  • Sharing safety knowledge resources with employees
  • Conducting regular comprehensive safety checks

Not only will a safety program help keep your employees safe, but your business will see a strong return on investment (ROI). Studies suggest that for every dollar your company spends on safety, you’ll see a return of four to six dollars. 

Another benefit of focusing on safety is that it helps boost employee morale. A culture of safety makes employees feel safe.

Create an Injury Response Plan

What if employees sustained injuries while at work? It is best to manage the incident as quickly as possible, which means having a plan in place. Your plan should include clear instructions for how supervisors and employees should respond and who they need to contact. 

In addition, make sure you notify your insurance agent as soon as possible, even if the injury is minor. Even minor injuries can develop into a more serious condition if not treated properly, and many states require that all workplace injuries be reported. The quicker you notify your agent, the faster a claims adjuster can investigate the incident and get claims processed promptly. 

Having a response plan in place will help make your employees feel assured that everyone will know what to do if an accident happens.

Create a Return-to-Work Program

Having a safety program does not mean that your business will be free from accidents. That is why it is essential to have a return-to-work plan as well. This will help lower your Workers’ Compensation insurance premiums.

How? In general, a claim becomes more expensive the longer it remains open. A return-to-work program can help employees get back on the job as soon as possible, even if it’s part-time or with modified duty. Make sure your company is coordinating the return-to-work process with the medical provider of the injured employee. This helps ensure the employee returns when they’re comfortable. 

Keeping in touch with an injured employee will also help them feel less isolated while they’re away from work and help minimize the employee’s chances of permanently leaving. 

Stay in Touch with your Insurance Agent

It is essential to have all the necessary safety measures to ensure that employees will be happy, safe, and secure at work. When implemented properly, you will eventually see fewer on-the-job accidents. This is good news for both your business and employees. Strong safety records and preventative programs can go a long way in lowering your premiums, especially if you’ve had previous claims.

Ask your insurance provider if you are eligible for discounts or rewards for minimizing workplace accidents. Some providers may even provide pay-as-you-go options instead of paying one lump sum annually, which can help lessen the strain on your cash flow.

The Key Takeaway

Carrying Workers’ Compensation insurance is a crucial legal requirement in most states for businesses. It is an essential investment, but you don’t need to break the bank on premiums. You can lower your costs through the tips mentioned above.

Make sure to implement safety protocols to keep employees out of harm’s way. And if on-the-job accidents occur, follow your incident response plan and return-to-work program to lower your insurance premiums. 

Employees also benefit from these cost-saving measures. They will feel empowered and safe while at work. You and your employees will also have peace of mind, knowing that both parties are protected.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. 1-800Accountant assumes no liability for actions taken in reliance upon the information contained herein.