If you own a small business and have at least one employee besides yourself, by law you have to carry workers compensation insurance. In today’s tough business environment, saving every penny and avoiding unnecessary costs can determine whether or not the doors stay open.
Here are the best ways to save money on your Workers Compensation insurance. Each of these strategies are important. However, in our experience, #1 and #8.5 will most likely save you the most money.
1. Shop & Compare…Every Year!
If you are serious about saving money on your insurance costs every year, you must shop and compare. Every year there are new carriers entering into the California Workers Comp marketplace and your existing broker may not have access to some of these new options.
To help ensure you are not missing out on any new options, make sure that your broker is a CIS (Construction Insurance Specialist). If your broker is not showing you 2 to 3 options every year and simply auto-renewing you with your existing policy, you may be paying more than you need to.
2. Take advantage of a group rating
Just as with healthcare insurance, group rates on workers comp can mean huge discounts for your business. Even if you don’t have a large number of employees you may still be able to take advantage by belonging to an industry or trade association.
3. Ask your insurance carrier or broker for help
Invite your agent or a company representative to visit your workplace and identify potential hazards. Then document that you’ve remedied the problems. Welcome annual reviews.
4. Have a documented safety program
The State of California requires that you have a written safety program. A solid safety program also demonstrates to insurance carriers that you take this stuff seriously. Insurers will be more impressed if you give your program more than lip service by documenting regular on-the-job-safety training/updates for staff. You should also require that employees sign off that they’ve read and received your program material. Contact us if you need a Safety Program. We can help get you started in the right direction!
5. Have a return-to-work program
Accidents will happen even in the safest work in environment. When they do, a return-to-work program can help you contain costs. The longer a claim stays open, the more it costs your insurance company–costs that are ultimately passed on to you. The goal is to close any workers comp claim as quickly as possible by getting the injured work back on the job, even if it’s part-time or reduced duties approved by the employee’s medical provider.
6. Support a substance-free workplace
Employees who use drugs or alcohol on the job cause injuries to themselves and others. They also cost their employers about twice as much in workers comp and medical claims as non-abusers, according to data from the Substance Abuse and Mental Health Services Administration. At bare minimum, make hiring contingent on passing a pre-employment drug test. You may also want to consider random testing for all employees.
7. Make sure you have the proper job classifications
Write complete, accurate job descriptions for each employee and make sure nobody steps outside his or her responsibilities. A receptionist who injures herself lifting heavy boxes could hurt you when she files a claim. Also know that workers may be classified as independent contractors for tax purposes but still be considered employees by your state’s regulators.
8. Educate your employees about the difference between minor injuries and reportable incidents
Avoid unnecessary reporting that can create adverse loss ratios on your workers comp record. Small injuries likes minor cuts or scrapes that can be treated with on-the-job first aid, an office visit and a follow-up for observation should not be reported.
9. Voluntary insurance benefits may help reduce workers’ compensation claims
Because of the high direct and indirect costs of claims, companies are naturally looking for ways to reduce their workers’ compensation claims. Voluntary insurance benefits could be the answer. Of employers who offer voluntary insurance, more than 50% offer voluntary accident insurance. Of those who offer this benefit, 51% say they have seen a decline in workers’ compensation claims since doing so. This strategy alone could have the biggest impact on reducing both your short and long term Workers Compensation costs.
The ChamberGUARD Workers Comp program is designed specifically for Small Business Owners with 2 to 50 employees and is exclusively available through The Chamber Resource Group. With some of the lowest premium rates available , the ChamberGUARD program provides benefits to both business owners and their employees.
To learn more about the ChamberGUARD Workers Comp program and to see the Workers Comp discounts available: CLICK HERE
You can also contact Kevin at: 530.320.3617 or email [email protected]
About The Chamber Resource Group: For over 20 years, The Chamber Resource Group has been serving Small Business Owners and Chamber Members and is considered to be one of the largest and most respected insurance and business services companies in California.