The key is advance planning.
1 Make sure your employee classifications are correct. There are 500 to 600 job classifications to choose from, and getting the best fit possible can mean getting the lowest rate possible. Sometimes employees whose duties are only clerical get included in much more costly job classifications when those are the business’s primary classifications. For example, a bookkeeper/administrative assistant in an auto body shop should not be classified as a body shop worker.
2 Develop relationships with medical providers who specialize in occupational medicine. Injured employees will often go to their personal doctor or use a walk-in facility when an injury occurs. When this happens, employees do not get optimal treatment and you incur higher costs. Your agent can help you identify physicians who have the right training and who will get to know your business, the type of work performed and the best treatments for your workers.
3 Have a system in place to make sure injured employees get immediate medical care. In many instances, injured employees are simply sent home or let go for the day so they can go to their own physician or go to an emergency room. Your goal should be to make sure injured employees get immediate medical attention so they can get the care they need and return to the job as soon as possible.
4 Use data to control losses. Review your workers’ comp loss runs and OSHA logs regularly with your broker to assess ways to improve your systems, processes, training and other factors that can reduce future losses. Also, pay attention to data about the kinds of accidents that are typical for your type of business and develop ways to foresee and mitigate claims before they occur. Here are the 10 most common workers’ compensation claims:
• Overexertion (results in pulled muscles or flagging attention)
• Slips, trips and falls
• Falls to lower level (such as falling off a ladder or a roof or down a flight of stairs)
• Bodily reaction (such as a fall avoided that causes injury as a result of the avoidance)
• Struck by object
• Struck against an object
• Highway incident
• Machinery accidents
• Repetitive motion (carpal tunnel syndrome or tendonitis, for example)
• Workplace violence
5 Be prepared for your annual workers’ comp premium audit. To make things go as smooth as possible with your audit, have a list of all employees, their hours, duties, payroll classifications and payroll. You should also list all job descriptions and differentiate clearly between employees and independent contractors. Your agent can help you review and prepare for your audit.
6 Review your company’s Annual Unit Statistical Report. The Unit Statistical Report is the evaluation of losses and other information your insurance company submits to its rating bureau each year. The report will include the premiums you’ve paid and the paid and reserved losses occurring during the reporting period. It’s important to review this data carefully because if the insurance company sets a very high reserve on any of your claims or keeps open claims that should have been closed, your experience modification factor will go up, costing you more in premium.
7 Develop a “light duty” or “recovery at work” program for injured employees. If an employee returns to work before lost-time wages start, this can create a significant cost savings and reduce the impact on your experience factor. More importantly, injured workers recover faster if they remain working, even if they are doing work that is less critical or demanding than their regular job. The important thing is to keep them engaged in their work. By consulting your company physician, you can design work activities appropriate for the employee.
8 Check whether a claim might be eligible for second injury funds. More than 20 states have “second injury funds” that pay benefits to workers when an injury aggravates a pre-existing permanent health condition. Over half of all injured workers have a pre-existing condition, according to one expert. When you have an employee with a permanent impairment who suffers a second injury, you are responsible for compensating only the most recent injury. Many employers fail to realize this, often spending thousands of dollars more than they need to.
When a worker with a pre-existing injury or condition files a claim, the employer should make the claims adjuster aware of the pre-existing injury or condition. The adjuster will calculate the settlement value of the claim, and/or file the claim with the second injury fund. Submitting a claim to a second injury fund can help employers with experience-rated workers’ compensation policies avoid a big premium increase. It can also make it more appealing to hire former military service persons, many of whom have service-related disabilities
9 Remember to ask your agent for help. Your agent is your best asset for help implementing any of these loss control and premium saving ideas. Your agent can also help explain anything about your policy or the many intricacies of workers’ comp insurance. Your agent is also your advocate and will help you get the best possible coverage and rates from your insurance company.