At some point, every company is going to experience an increase in their workers’ compensation premiums. When this happens, it usually triggers an internal scramble aimed at reducing insurance costs and spending.
Unfortunately, these efforts are often misfocused on issues with a minimal impact on reducing the overall cost of risk.
The key to reducing your workers’ compensation premiums is more than just stopping a few accidents; it is having a sound safety program designed to continuously improve the operational efficiency of your organization.
This is where a safety program that, at a minimum, meets OSHA compliance standards can yield significant savings for your business by reducing injuries and illnesses, saving workers’ compensation dollars.
Five Ways To Reduce Your Workers’ Compensation Premiums
There are five elementary steps your business can take to have a well-rounded safety program that produces a safe work environment, achieves OSHA compliance, reduces accidents and ultimately reduces workers’ compensation costs.
- Develop the programs required by the OSHA standards.
- Integrate OSHA compliant programs into daily operations.
- Investigate and track all incidents, injuries, and illnesses.
- Provide training to develop a culture of safety in your business.
- Audit your programs and processes a regular basis to stimulate continuous improvement.
What should immediately jump out at you is the lack of a “quick fix” or “silver bullet” solution to reducing workers’ comp premiums. Taking control of your workers’ comp program takes time, effort and focus most business owners do not have on a day-to-day basis.
This is where Rogue Risk can help.
1) Develop Programs Required by OSHA Standards
Aside from being a requirement for the general industry, the OSHA standards provide a good pathway to incident reductions.
The mantra inside the insurance industry is,
“Frequency breeds severity.”
If you can limit the frequency of incidents, you can effectively reduce the combined severity of incidents.
A good number of accidents stem from poorly developed or poorly implemented OSHA programs:
- Failure to keep walking and working surfaces clear may result in slips or trips,
- Not using personal protective equipment may result in excessive lacerations, and,
- Poor lifting techniques can result in strains.
Many of the OSHA standards require some type of written program to be developed and then communicated to employees. Experience shows that companies with thoroughly developed OSHA-compliant programs have fewer accidents, more productive employees and lower workers’ compensation costs.
2) Integrate OSHA Compliant Programs into Daily Operations
Policies alone won’t get results; your OSHA program must move from paper to practice in order to succeed.
Putting policy into practice requires a strategic plan clearly communicated to key participants, good execution of that plan based on developed competencies and a culture that inspires and rewards people to do their best.
When developing any business initiative, there must be an emphasis on frontline supervisors and helping them succeed. Every good business person knows that any new program—safety, quality or anything else—lives and dies with the frontline supervisor.
If the frontline supervisor knows the program and wants to make it happen, the program succeeds; if not, the program is a source of constant struggle and an endless drain on resources and energies. Providing supervisors with knowledge and skills through training is critical to the success of any program.
This is all clients in our RogueComp program get access to our propriety database of OSHA training manuals and program guides.
A solid OSHA program integrated into the daily operation and led by competent supervisors is just the beginning.
Successful safety programs focus on being proactive instead of always reacting to issues. Accident investigations provide an excellent source of information on real or potential issues present in the workplace.
3) Investigate and track all incidents, injuries, and illnesses
Workers’ compensation is designed to financially restore employees for injuries or illnesses they suffer in the course of their employment.
This should not come as a surprise, but increasing numbers of claims drive up workers’ compensation costs (frequency breeds severity).
To reduce those costs, you must reduce your incidents which will, in turn, reduce your accidents. The ability to reduce accidents is improved when those accidents are fully investigated instead of simply being reported.
Accident reports are historical records only citing facts, while accident investigations go deeper to find the root cause and make improvements.
In order to stop rising workers’ compensation costs, your business must develop and deploy an accident investigation process that discovers the root cause of the problem.
Unless the root cause is discovered, recommendations for improvement will remain fruitless.
Training is the key. A supervisor skilled in incident analysis is a better problem solver for all types of production-related issues, not just safety.
Investigate Every Incident
All accidents should be investigated to find out what went wrong and why. Some may suggest investigating every accident is a bit over the top and only those that incur significant costs are worthy of examination.
But ask yourself this question: If you only investigated serious quality concerns instead of every little deviation, would your quality program still be effective?
Frequency breeds severity.
Companies with solid safety programs investigate and resolve every incident and where it deviated from quality standards.
First-Aid Only Incidents
If your emphasis is only on those incidents that have to be recorded on the OSHA 300 log, you close your eyes to the biggest accident category: first aid-only incidents.
Many companies get upset about recordable or lost time accidents because of the significant costs involved, but they don’t realize that the small costs and high numbers of first aid-only incidents really add up.
Statistics show that for every 100 accidents, 10 will be recordable and one a lost-time incident. If you investigate only recordable or lost time accidents, 89 go unnoticed.
Would you consider a quality program that allows an 89% failure rate successful? Reducing serious accidents means you must reduce your overall rate of all accidents – including first aid-only incidents.
That only happens when every incident is fully investigated to find the root cause, and remedial actions are identified and integrated into the daily operation.
Training plays a significant role in your safety program and reducing workers’ compensation costs.
The goal of training is to develop a culture of safety, efficiency, and effectiveness inside your business.
Competently trained employees who have the knowledge, skill, and understanding to perform assigned job responsibilities get hurt and sick less often. Competence, more than anything else, will improve all aspects of your business and drive down costs (workers’ compensation insurance premiums not the least of which).
Supervisors must have the knowledge and ability to integrate every safety program into their specific areas of responsibility. Every employee must know what is expected of them when it comes to implementing safe work procedures.
We understand this is no easy task. In the competitive business landscape, few companies have the time or resources to either hire a safety manager or have leadership stop and train employees themselves.
The good news is, you don’t have to take on OSHA compliance and safety program implementation on your own, Rogue Risk can help.
5) Audit Your Programs for Continuous Improvement
Once the programs are developed and implemented, they must be reviewed on a regular basis to make sure they are still relevant and effective.
Safety standards are constantly changing and so is your business. This means your safety programs must constantly adapt to meet the need of both.
This might require a significant change in how you manage your safety program, but if your workers’ compensation rates are high, it may be time to make this leap. You can start with a free Workers Comp Experience Mod Audit Review. This will have the most immediate impact on your overall cost of workers’ compensation insurance.
Our Experience Mod Audit will also help shine of light on the most glaring pain points in your safety program.
Benefits of Workers Comp Audit
- Studies indicate there is a return on investment and that companies see direct bottom-line benefits with a properly designed, implemented and integrated safety program.
- A competency-based safety program is compliant with OSHA requirements and therefore reduces the threat of OSHA fines.
- A competency-based safety program lowers accidents, and fewer accidents lower workers’ compensation costs. When incidents do occur, a competency-based safety program fully evaluates the issue and finds the root cause to prevent reoccurrence and provides a workplace that is free from recognized hazards.
- A safer workplace creates better morale and improves employee retention. Auditing keeps your programs fresh and effective and drives continuous improvement.
- A competency-based program produces people who are fully engaged in every aspect of their job and are satisfied and fulfilled producing high-quality goods and services.
At Rogue Risk, we are committed to helping you establish a strong safety program that minimizes your workers’ compensation exposures. We take a consultative approach to the business of insurance, walking you through the process step-by-step, helping you build a safety program that works for your business.
To learn more about our OSHA compliance, safety program, and accident investigation tools and resources, I’d encourage you to reach out to us at Rogue Risk, today.
I hope this article helped you better understand a few ways to reduce your workers comp premiums.