Worker’s compensation insurance is a required and essential insurance policy for any company with workers to have. It should be an essential overhead cost to calculate your finance small business. Worker’s compensation covers injuries employees acquire as they work and ensures they are protected until they are healed. As the head of the company, this insurance can be a major expenditure to worry about per month. There are ways to decrease the costs associated with worker’s compensation. Here is how to lower worker’s compensation insurance costs with 5 easy tricks.
Build A Culture Of Safety
The best way to limit costs is to build workplace safety practices. Look for ways to improve workplace safety overall through new rules and regulations. You can also establish a safety course for all your employees. Much of your insurance’s premium rate is determined by your company’s history of accidents. If you can even prevent a few injuries through safety, it will save you considerable expenses. Additionally, safety certifications can also lower your rate. If you prove to the insurance that injuries are a rarity, they will lower your costs.
Properly Train Workers
Having a safety program is useless if it cannot be applied by your workers. As a good manager, you must train your workers well. Teach them not only what the safety program entails, but also exactly how to do their job. Safety management has to come from both you as the business owner and each employee you hire. Having trained professionals work for you lowers your risk of accidents and will, therefore, reduce your workers’ compensation costs by not having any costs to begin with.
Start A Return To Work Program
Build up a return to work program to shorten injury leave. If you have an injured employee recovering at home, you not only pay more in compensation to cover their wages, you then have to pay another employee to do their jobs. The cost of this can expand quickly. A return to work program will encourage injured employees to return to work as soon as possible. Even if the injured employee cannot return to their full duties, having them back and working in any capacity saves you money they receive in insurance. Additionally, this helps maintain workplace ties and helps the injured overcome the loneliness of recovery.
Do thorough investigations of all accidents, even if no one is injured. This will help you change policy to avoid similar accidents in future. Such steps will also lower the number of claims over time. This incident management and attention to detail is also useful if a claim is filed. Such investigations can go a long way to determining cause. If you can prove the employee was injured because they failed to follow guidelines, your lawyer may be able to get the amount paid out by insurance reduced. Having detailed information about all accidents can help you in many ways when it comes to insurance costs.
Outsource To A PEO
By outsourcing to a professional employer organization (PEO), you can reduce your overall compensation expenses. A PEO shares responsibility for workers’ compensation with you. With a lower amount of responsibility, you will have lower compensation costs. A PEO can provide your company with numerous services such as payroll processing and human resources services. The organization manages any compensation claims your business receives. They can lower your premiums, supply coverage, and provide safety knowledge. Outsourcing to a PEO in order to reduce the costs of workers’ compensation while also reducing the amount of work required of you.
Analyze Data You Send To Insurance
Making sure the payroll information you send to the insurance company is correct and up to date. Your premium is calculated using your insurance rate, how many people are on your payroll, and a modifier determined by your company’s history. If you have old employees who don’t work for you still on the payroll, you could be paying considerably more then you need for insurance. Your numbers may also be effected by how much training your employees have had. In these calculations, a few wrong numbers can cost you thousands. Make sure the information they receive is up to date and that you are receiving the right rate.
Use Accurate Industry Classification Codes
Your workers’ compensation costs are calculated based on an industry classification system. Through this system, you’re required to assign codes to each of your employees. These codes are based on the risk level of each individual’s particular job. Many business owners make the mistake of assigning every employee to the same code. This leads to higher small business commercial insurance costs when an employee working a lower occupational risk job gets injured. Accurately assign industry classification codes to each employee to save money on compensation payments.
There are many good ways to lower your worker’s compensation insurance costs. Decrease your number of accidents. Build a return to work program to encourage employees to recover on the job. Investigate accidents to protect against them and fraud. Make sure the data you send the insurer is up to date. Regularly audit the insurers calculations to ensure there have been no mistakes. With these five tips, you can keep worker’s compensation costs from ballooning out of control.