Five Ways to Reduce Workers’ Comp Costs

Every business in this country is required to maintain workers’ compensation insurance to protect its employees from monetary loss due to job-related injury.  A business needs to be proactive to keep worker injury in check in order to control its workers’ compensation insurance costs.  This is where a safety program that, at a minimum, is compliant with the standards established by the Occupational Safety and Health Administration (OSHA) can yield significant savings for a company by reducing worker injuries, thereby reducing workers’ comp insurance premiums.

Building a Solid OSHA Program

There are five elementary steps any 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 insurance costs.

1. Develop programs required by the OSHA

2. Integrate those programs into daily

3. Investigate all injuries and

4. Provide training to develop safety competence in all

5. Audit your programs and your work areas on a regular basis to stimulate continuous

Develop Programs Required by OSHA Standards

Aside from being a requirement for industry in general, the OSHA standards provide a good pathway to incident reductions. A large number of accidents result from poorly developed or poorly implemented OSHA programs: failure to keep walking and working surfaces clear may result in slip-and-falls, not using personal protective equipment may result in excessive lacerations, and poor lifting techniques can result in strains.

Many of the OSHA standards require that some type of written program be developed and then communicated to employees. Experience shows that companies with fully-developed OSHA-compliant programs have fewer accidents, more productive employees, and lower workers’ comp insurance costs.

Integrate Programs into Daily Operations

Policies alone won’t get results unless they are integrated into a business’ daily operations.  A safety program must move from paper to practice in order to succeed. Putting a 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 helping frontline supervisors to succeed. Every good businessperson 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.

While a solid OSHA safety program, integrated into the daily operations of a business and led by competent supervisors is imperative, it is just the beginning. A successful safety program needs to be proactive.  Effective accident investigation can provide an excellent source of information on real or potential issues present in the workplace and help a business update its safety program to help prevent future incidents.

Investigate All Injuries and Illnesses

Workers’ comp insurance is designed to compensate employees for injuries or illnesses they suffer in the course of their employment. Obviously, as the number of claims increases, a business’ workers’ compensation insurance premiums increase as well.  To reduce these costs, a business must reduce and limit the number of employee-related accidents. And, in order to reduce future accidents, each incident must be fully investigated.  A simple accident report is not enough.

An accident report is simply an historical record of what happened.  On the other hand, an accident investigation goes deeper to find the root causes of the incident in order to correct deficiencies and make improvements. Businesses that are able to control workers’ compensation insurance costs have an effective accident investigation process that enables them to discover why an incident happened and how to prevent it in the future.  Unless a business can determine why an accident happened and take steps to correct the problem, it is likely to recur.   A well-trained supervisor is essential for a successful accident investigation program.  A supervisor is closest to the situation and is in the best position to monitor the safety practices of the business’ employees.

It is imperative that all accidents be investigated, not just those that cause significant injuries and costs.  Think about this in terms of a business’ quality control program.  What if a business only cared about major deviations from a product’s specifications and overlooked multiple minor deviations?  Those minor deviations add up and would result in a defective product, even though any single deviation might appear too minor to have an adverse effect on a product’s quality.  So too with accident investigations.  If a business only investigates serious injuries and overlooks minor incidents, those minor incidents will add up and result in increasing workers’ comp insurance premiums.

Training and Auditing for Continuous Improvement

The final steps in an effective safety program are training your personnel and auditing your program.  Training plays a significant role in worker safety and in reducing workers’ compensation insurance costs. The goal of training is to develop competent people who have the knowledge, skill and understanding to perform assigned job responsibilities. Competence, more than anything else, will improve all aspects of your business and drive down costs. 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. Then, once the safety program has been developed and implemented, it must be reviewed on a regular basis to make sure it is still relevant and effective.

This might require a significant change in how you manage your safety program, but if your workers’ comp rates are high, it may be time to make this leap.

Tangible Benefits

1. 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.

2. A competency-based safety program is compliant with OSHA requirements and therefore reduces the threat of OSHA.

3. A competency-based safety program lowers accidents, and fewer accidents lower workers’ compensation insurance 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.

4. A safer workplace creates better morale and improves employee Auditing keeps your programs fresh and effective and drives continuous improvement.

5. 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.

How Can We Assist You With Workers’ Comp Insurance?

At RMC Group, we are committed to helping you establish a strong safety program that minimizes your workers’ compensation insurance exposures. Contact us today at 239-298-8210 or [email protected] to learn more.