This blog is about 4 risk management strategies that can help reduce your workers compensation insurance costs.
Look, let me tie this in with an idea.
The way that you keep your costs down on workers compensation insurance is you create competition between insurance companies, and the way you create competition is you make underwriters interested.
So how do you make underwriters interested in insuring your business?
One big part of it is demonstrating that you're going to be profitable for them.
If you can have an underwriter look at your business and say “Wow, that one’s got better housekeeping practices than their peers”, and you’re a type of business they’re interested in insuring, they’re going to be much more willing to get aggressive with their offer to insure you.
They might even bend over backwards to win you.
This is one of many reasons why strong safety practices are key to an effective organization. It will help you manage your costs in the long run.
So here are a couple of ideas on things that you should be demonstrating to an underwriter that you're doing that's going to make them more interested in your account.
1. Protective equipment – gloves and goggles
First off, make sure that you're having your team wear the appropriate protective equipment.
If they need goggles, have them wear goggles. If they need gloves, have them wear gloves.
Reduce and mitigate the scenarios where your team will hurt themselves by making sure they're wearing the appropriate equipment.
I know this can be hard. The equipment can be uncomfortable. People don't like wearing it, but it's very important.
And you as the owner set the standard on how it's going to be done. You communicate what's important.
Make sure that your team is using the appropriate equipment, because it’s what is best for the team’s safety, and selfishly, demonstrating this to an underwriter can go a long way.
2. Prevent Slip & falls – maintain a safe and clean working environment. Wear the proper shoes
Slip and falls are one of the most common workers compensation claims. They are caused by several factors.
1. Slippery services. This can be because of wet floors, ice and snow, or wet materials
2. Poor Housekeeping. Debris, tools and equipment, and cluttered work areas can cause people to trip.
3. Uneven walking surfaces. Uneven ground or unsecured flooring can cause trips.
4. Lack of Personal Protective equipment. I know it’s a theme in this article, but the proper equipment can make a big difference.
It’s hard to control what our employees do. Sometimes they are in a rush to finish a job or leave the worksite. Sometimes they are distracted because they are talking on the phone or distracted by life. We control what we can, and document what we can.
That documentation helps to tell a great story to an underwriter.
3. Ladder Safety – falls from heights are a common injury
One of my colleagues in the agency used to manage a store for Walmart. He told me that ladder injuries happened all the time. People would be coming down the ladder, miss the bottom rung, and then their lower back would hurt. To solve this problem, his Walmart store labeled the rung on each ladder to signify to employees when they were nearing the bottom of the ladder.
Take precautions like this to promote ladder safety. Many insurance companies will have sample ladder safety policies they can send you, and some will even have online training videos you can use to educate your employees. These resources are effective in so much as they can help you implement change within the organization.
But from a negotiation perspective, they help a lot.
4. Property lifting techniques & stretching – prevent muscle strains and overexertion
Bad lifting techniques can lead to an assortment of injuries – Back, shoulders, knees, hips, etc…
All of these injuries can result in extended time off, which is always disruptive for a business. That means a workers compensations claim needs to be managed, teams need to be shuffled, maybe you’ll need to pay overtime for other employees to cover the injured person while they’re out…
Life is better when there are no claims. For everyone.
A couple of ideas for proper lifting techniques:
1. Make people stretch before lifting. This is an idea that comes from my Walmart friend.
2. Use proper technique.
3. Assess the load. Use Mechanical aids where necessary
4. Wear Proper protective equipment
5. Take Breaks,
6. Stay Fit.
If you can tell a story on how you're educating your people on how to do it, how you encourage that behavior, how you make them stretch so that their muscles are limber, it's all going to be part of a good story to tell to an underwriter that's going to get them to be engaged.
Conclusion:
There are no direct discounts for doing these things. That’s not how it works with commercial insurance. Here’s how it works:
If a company can make money insuring you, you can create negotiation leverage. If they are going to break even or lose money, you have no leverage.
This is why running a good business operation will save you money on insurance in the long run. Claims are very commonly a second order effect of your everyday business practices. Manage your business practices, and the claims will fall in line.
Then when the claims fall in line, you can tell a story like this to an underwriter:
“We recognized that we were likely to have (XXXX) kind of claim. As a business, we recognized that risk, so we implemented (XXXX) business practices. After that, we have noted a significantly reduced number of incidents and claims.”
An underwriter will read this note and see a savvy business operator and will want to be aggressive.
For workers compensation, these are 4 practices that can help you with that narrative.
If you are an electrical contractor in Frederick, or the state of Maryland, and would like to discuss your insurance and risk program with me, you can contact me in a couple of ways:
301-526-2046
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