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Workers Compensation: Dollars and Sense

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In our previous post we covered the basic definition of Workers Compensation and its tremendous value for companies to protect themselves against lawsuits from employees with job-related injuries or sickness. So if you’ve decided that your business needs Workers Compensation, the next question is: How much does it cost?

One Price Does Not Fit All. As you can imagine, some industries or occupations place their workers at a higher risk than others. A roofer obviously stands more chance of getting hurt than a cubicle worker. For this reason, insurance providers rate Workers Compensation rates according to the relative risk, just as they would any kind of personal insurance. Different worker classifications on your payroll will cost varying amounts to cover. And in this ‘soft market’ environment, pricing across different carriers can vary substantially – this is a good time to review your costs with an advisor.

Keeping Costs Down. If Workers Compensation rates are pre-determined by occupational injury risks, then does that mean that you’re powerless to control how much your coverage will cost you over time? Not at all! You can still control one huge factor of the Workers Compensation equation – how much abuse the policy will suffer at the hands of its employees.

It’s an unfortunate fact that while most injured employees genuinely need Workers Comp and use it appropriately, a few bad apples will always try to game the system for their own convenience. There are a number of things you can do to limit your liability and control costs. During the hiring process, make sure your application has a question regarding the candidates ability to perform the duties of the position (be careful on the wording of this question to avoid ADA issues), and in many instances, utilize background checks for all new employees. The greater the physical demands on your staff, establish safe workplace policies and initiate worksite training programs (lifting, slip & fall prevention, repetitive motion, etc.). Finally, engage your Property & Casualty advisor to do site inspections whether you have an office environment, manufacturing, warehousing, etc. Most advisors are adept at identifying and directing you to loss prevention and safety resources that will help manage your risk, liability and long-term costs.

Workers Compensation carries one other potential benefit that makes it even more affordable. Recently passed legislation now allows businesses that use a network of preferred medical providers to discount 8 to 15 percent off their premiums – review your policy with an advisor to make sure you are taking advantage of this cost control feature.

Thanks again to David Miller, VP, Small Business Insurance at Eckert Insurance for his insights on risk management and mitigation. Please feel free to contact David at dmiller@eckertgroup.com or (512)472-6969 with any questions.

Dan Hettrich is the director of sales at Acadia HR located in Austin, Texas. He can be reached at dan@acadiahr.com or 512-745-2985.

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Written by Dan Hettrich

March 25, 2011 at 12:27 pm

Posted in Uncategorized

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