Many great businesses are built on the foundation of a strong workforce. Successful business owners are aware of the importance of taking care of their employees. A workers’ compensation policy helps protect your business and your employees.
How Is Workers’ Comp Cost Calculated?
The cost of your worker’s compensation policy is based on a simple formula. First, insurers assign you a rate based on factors such as the state where you operate your business and the type of business you own. This rate is multiplied by your payroll and divided by 100 to calculate your workers’ comp cost.
Ways to Lower Your Workers’ Compensation Costs
The following are a few ways in which you reduce your workers’ comp costs.
1. Look for Discounts
Shop around before you choose a policy. If your business is involved in a competitive market, contact multiple companies to inquire about their monthly rates. Then, once you choose a policy, evaluate it every couple of years to check whether you are eligible for new discounts.
2. Emphasize Safety
One common workers’ compensation cost reduction strategy is promoting safety throughout the workplace. This can also help improve your employees’ morale. Inform your employees about essential safety resources and discuss best practices. Conduct safety checks regularly. Regular safety checks are important because they help your employees stay safe while they work. It also sends them the message that you care about them.
3. Develop a Claims Management Strategy
Make sure that your claims adjuster adheres to the best practices related to claims management. Following the best practices can reduce payouts and help your business save money. Focus on completing simple tasks and make sure that all the necessary paperwork is completed promptly. Your claims adjuster should keep a record of all completed work related to the claim.
4. Create an Incentive Program
Incentive programs are appealing to new employees. For example, you can reward your employees for following certain safety guidelines. In addition, experienced employees should mentor new ones on the benefits of following the safety protocols.
5. Set up Injury Protocols
It is important to manage small injuries promptly before they cause larger problems. Supervisors should take urgent action if there is an injury in the workplace. The claims adjuster also has a responsibility to make sure that things run smoothly. Encourage your employees to make decisions that will minimize a potentially serious workplace injury.
6. Research State Laws
States offer various rates depending on the classification of a business. Your state may be able to offer your business a discount, especially if you have created a robust safety program.
7. Set up a Return Program
Staying in constant contact with your injured employees while they are away from work can reduce the cost of workers’ compensation claims. You should also set up a program that allows your employees to return to work as soon as they are healed.
8. Establish Safety Goals
Establish safety goals to reduce the number of workplace accidents. You might even be eligible for discounts on your insurance policy if you improve the safety measures throughout the workforce. Check with your insurer to see if they offer safety rewards if your claims drop drastically from one year to another.
As a business owner, you want your employees to stay healthy and productive on the job. However, accidents can happen at any time. Workers’ compensation helps keep your employees safe. There are multiple strategies that you can implement to reduce your workers’ compensation fees. Our experts at Kneller Insurance Agency will help you develop the right cost reduction strategy for your business. Contact us today to learn more.
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