There are many steps an employer can take to reduce its workers compensation premium costs. For example, safety training educates workers avoid potential accidents and injuries. Worksite inspections help identify hazardous conditions that need to be corrected. There are other actions that a business can undertake that will also significantly decrease premium costs
Companies focused on safety should consider a “loss sensitive” insurance policy. These types of policies are less expensive because the company shoulders more of the risk. A company may choose a higher deductible, sometimes as high as $100,000 or more which would require it to pays claims up t that amount. In return, their premium is lowered significantly. Combined with solid training and safety programs, a company can usually save thousands of dollars in up-front premium costs.
Companies can also review classification codes. Often, companies use the same class codes year after year. However, as the company evolves, class codes may need to change. As the company gets better equipment and eliminates certain job functions, it is appropriate to update class codes for each and every job. Here’s an example: an agricultural client raised cattle for many years and had some of its payroll applied to a livestock handling classification. During a review of company operations, we discovered that the company discontinued the livestock operation several years ago, but had continued to report the payroll under the livestock handling classification. Removing that classification reduced their premium significantly.
Finally, aggressive claims management can have a big impact on your experience mod, and ultimately your premium. Many claims get opened and high reserve levels are set even though little or nothing has been done on the claim. In some cases, claims remain open even though little or no dollars are spent on them. However, the claim reserves count against loss experience and have a negative impact on the experience mod. Working closely with adjustors can help minimize and close claims quickly to mitigate the impact they have on your loss experience.
A proactive approach to your workers compensation program can have a significant impact on your premiums. Western Growers Insurance Services has successfully helped many of our clients lower their costs by helping them navigate these issues. If your company is need of a workers’ comp review or would like more information, contact Greg Nelson at (949) 885-2287.