- Manage Your Risks
- Take Advantage of Saving Opportunities
- Be Sure Your Premium is Correctly Figured
- Avoid the Assigned Risk Fund
Manage Your Risks – Most small companies cannot afford to hire a risk manager. Nevertheless, someone in the company should have a continuing responsibility for loss control and the management of workers’ compensation claims. This involves a variety of programs to keep workers safe, the medical management of claims and early return to work for any injured workers.
In some states insurers must provide accident prevention services to employers. Even if not required to do so by law, the majority of workers’ compensation carriers can help you improve safety. In some states, employers are required by law to set up safety committees and other programs to deal with unsafe conditions in the workplace. Even when not required by law, safety committees can be very effective at reducing accidents. Additionally, regularly scheduled safety meetings, “ToolBox Talks” and “Lunch and Learns” are extremely beneficial in helping to foster a safety culture.
You may also want to consider establishing formal hiring practices, implementing a Drug-Free workplace, developing an Employee Handbook, utilizing best practices and creating a company specific safety manual. Again, even if not legally required to do so, having and following written policies and procedures can help reduce accidents and ultimately reduce the total cost of your workers’ compensation program.
Take Advantage of Savings Available in Your State – Several states allow merit rating credits. Smaller businesses that typically pay $5,000 in premiums or less may be entitled to a credit of 5 to 15 percent if they have not had any lost-work-time claims during a designated period. In some states there are premium credits for drug- and alcohol-free workplace programs and safety programs. Some insurers may give you a discount if you hire a professional risk management firm to help you with your safety program.
Be Sure Your Premium Is Figured Correctly – Make sure you have been placed in the right industry classification code. Check that the insurer’s payroll computation adjusts for overtime pay and allocates the payroll of different employees correctly.
Avoid the Assigned Risk Fund – Cutting down on your claims is the best way to stay out of the state’s assigned risk plan, or insurer of last resort, which usually costs more. You may have been put into assigned risk without knowing it. Ask your agent to check on your status.
If you have been put in assigned risk, find out from your state workers comp agency if rates are higher. If they are, make a concerted effort to get other insurance. Just because one agent is unable to find something better for you doesn’t necessarily mean that it doesn’t exist. Talk with other agents, investigate group self insurance programs that may be available in your state and talk with other people in your industry and owners of other businesses of similar size and age and with a similar risk level.