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ARI Blog: Article

Tips to Save on Workers Compensation Premium (Part 2)

When calculating premiums for workers compensations insurance quotes for restoration contractors, underwriters take into consideration your company’s experience modification rate (EMR). This compares your company’s annual losses in insurance claims against those of similar businesses and multiples your EMR by your base rate to determine your premium. An EMR of 1 is average. If you’re over or under the average, your premium is adjusted accordingly. So anything you can do to prevent worker’s compensation claims and achieve a lower EMR is one of the best ways you can control the costs of workers compensation insurance for your small business. Here are some tips to do that.

Prevent Worker Compensation Claims for Lower Premiums

A proactive consistent on-the-job safety record tells insurance companies that your business is a good risk. As such, you’re far more likely to get competitive quotes for workers compensation insurance.

  • Have a written safety policy that is updated frequently.

  • Increase employee awareness of the importance of on the job safety with regular meetings, reward programs, etc.

  • Practice what you preach. Let employees see management actively adhering to and enforcing the company’s safety policy.

  • Assign a trusted employee to monitor on-the-job safety and seek out potential risk exposures. These can and should include hazards from walking, sitting and standing conditions, repetitive motion, lifting and moving, as well as structural hazards that someone could tip over, run into or trip on.

  • Review your company’s past and current claim history to identify areas of high risk and potential trends.

Manage Workers Comp Claims for Affordable Premiums

Part of your workplace safety program should include educating and encouraging employees to report any on-the-job injuries immediately to management so that the claim can be filed promptly with your workers compensation insurance company. Involving your insurance company early in the process gives your agent an opportunity to provide any guidance and advice that may lessen the impact of the claim on your premiums.

Another way to save on workers comp insurance by managing claims is to develop a back-to-work-fast program. The longer an employee is away from work, the more it costs your small business, both in lost productivity, wages to any temporary replacement employee and potential increases to your experience modification rate. Statistically, the longer an employee is away from work, the less likely he or she will ever return to the work place. Prolonged unemployment due to injury has a negative impact on mental attitude that can be costly on a personal level and to your business. Actively encourage injured workers to return to the workplace by providing safe, alternative assignments that let them earn while they return to full capacity. You can also create a company culture that supports the employee’s rehabilitation efforts. Showing that you value the employee and want him or her back on the job operating at 100% is a morale booster for your entire company.

Don’t leave the claim management to your insurance company. Be proactive in follow-up on claims until they are resolved.

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