Five ways construction firms can reduce workers' comp premiums
Ross Amato is a property and casualty consultant with Knight-Dik Insurance Agency, Inc. in Worcester. He can be reached at ramato@knightdik.com.
For anyone owning a construction company, workers' comp insurance is an inevitable necessity. But by learning how the system works, construction executives will be able to better manage and plan for unforeseen events.
1. Ensure accurate job classifications
Code misclassifications can cause workers' comp premiums to skyrocket, so it is critical to be sure the correct codes are being used. As many as 70 percent of companies overpay on their workers' compensation insurance premiums, and the root cause is most often job code misclassifications.
2. Provide proper care for injuries
Job injuries should be dealt with immediately. Develop a process to ensure injured employees receive the proper care. Processes are important, and they will vary depending on the type or injury. But it is equally important all employees know to immediately notify their employer or direct supervisor when an injury has occurred. This is a point at which it is critical to obtain the information for documentation while still remembering this is an injured employee who is in need of compassion.
With continuing medical inflation, it is especially important to ensure the employee receives the most appropriate care for their particular injury. If emergency treatment is not necessary, a walk-in occupational health or urgent care clinic are a lower-cost alternative to the emergency room. Assessing an injury upfront can help streamline an employee's recovery, get them back to work faster, and cut down on claim related expenses.
3. Review information on injuries
Speak to an insurance agent to make sure what has been paid on employee injuries is in line with what the insurance company is reporting to the rating bureaus. While this disconnect can simply be a matter of human error, it is often a result of miscommunication.
Communicating regularly with the insurance agent will ensure the most current facts of the case are being addressed and mitigate any potential errors.
4. Analyze your experience modification factors
Most insurance buyers assume their experience modification factors are correct, but this is likely not the case. If claims remain open and injury costs escalate, reserves rise and adversely affect the employer's experience modification factor, thus increasing costs.
5. Build a strong back-to-work program
Companies with comprehensive back-to-work programs can minimize or eliminate lost-time claims by bringing an injured worker back to work as soon as it is practical. It shows the employees they are valued and can still be productive in another capacity on the job. Fostering this feeling can help increase retention, thus reducing costs both on insurance and recruitment.
As part of this program, identify activities injured workers can do within the organization to bring them back as they heal, and help the employees identify additional skills they possess to fulfill needs of the organization.
A consultation with a trusted insurance advisor will help business owners assess their workers' comp insurance set-up. These simple steps will save time, money and have a real impact on gaining the support of the company's employees.
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