12 Cost Saving Tips For Workers’ Compensation In California
Workers’ Compensation in California is a State mandated fact of life – if you are an employer, you must provide it. It’s the law. But, like any other type of insurance, the ultimate goal is to get the best coverage available at the lowest possible price.
Premium costs are rising significantly, and workers’ compensation insurance can be a huge expense for any company or business. While it will always be a part of your budget, there are things that you can do to reduce and/or control this cost. When it comes time to renew your policy, a good track record of fewer and smaller claims, accurate reporting, improved processes and good employee management practices can save you money and ensure that you receive the best rates. These are outlined in the following 12 cost savings tips for Workers’ Compensation in California:
- Make Safety A Priority. A safe work environment will reduce the risk of injuries or accidents, which means fewer claims being made on your worker’s compensation insurance. There are a few simple ways to ensure your workplace is as safe as possible:
- Establish safety rules and make sure they are enforced.
- Set up a safety committee and schedule regular inspections.
- Get employees involved. Who better to point out potential hazards than the people who work in the environment on a daily basis?
- Offer incentives to “safe” employees.
- Ask your insurance agent to inspect your workplace and review your safety rules. They may be able to identify problem areas and offer helpful suggestions.
- Fix minor problems before they become major issues. Most serious accidents are usually preceded by “warning” signs.
- Establish Emergency Plans. Set up procedures for immediate reporting of incidents, and make sure that employees understand this reporting process. By having an emergency plan in place, you can help to minimize the severity of accidents or injuries and ensure that the situation receives both prompt and proper attention.
- Educate And Train Employees. Provide necessary training so employees know how to do their jobs safely and are aware of company safety requirements. Offer free courses in First Aid, CPR, and other emergency response procedures. Make “refresher” seminars a condition of employment so your workers are always adequately educated and prepared.
- Investigate Claims. Unfortunately, false claims are more common than you would think, and they lead to higher premiums for everyone. A little investigation can protect you and your pocketbook. Make sure that the claim is real and that the injury actually happened at work. Speak to supervisors and other witnesses, verify dates, and ask to see doctor’s reports. Since standard base or minimum rates are determined by loss experience, eliminating fraud will save you – and every other business owner – a lot of money!
- Monitor Claims/Claims Management. Be aware of any open claims, and monitor them carefully to make sure that they are being handled properly. Communicate regularly with injured employees. This not only shows that you care about your workers, but will also help you keep track of their recovery so you know what kind of financial losses to expect. Establish a policy that requires injured employees to use specified doctors or services. Physicians who understand workers’ compensation will provide good medical care while also ensuring that the no one abuses the system.
- Correct Classification. The workers’ compensation program divides employees into approximately 600 different classifications. The minimum rates for each classification are based on the type of work being done and the loss experience for that particular job description. For example, a construction worker would have a different level of risk than an office administrator. There can be a significant difference in premium costs between classification codes, and one of the main reasons for higher premiums is incorrect classification. Review each employee’s position and make sure they are placed under the correct code.
- Establish a Return To Work Policy. Identify light duty jobs or set up a program that will get employees back to work as soon as possible. Even if they can’t fill their original position immediately, try to find something for them to do while they are recovering. This can reduce the amount of money paid out on your claim and will help to keep your premiums lower. Some insurance providers even offer discounts for companies that have a return to work policy in place, so ask about this option.
- Enforce A Drug Free Workplace. Statistics show that drug/alcohol abusers cost employers twice as much in workers’ compensation claims than drug-free employees. And, more claims means higher premiums. Make drug screening a requirement for any job offer and inform employees that they will have to submit to regular, random drug testing.
- Pay Small Claims Out-Of-Pocket. Pay the small “First Aid” type medical only expenses yourself rather than making a claim on your insurance. Things like minor injury evaluation, stitches, or a prescription for pain medication which only require one doctor’s visit, will likely be more cost effective for you to cover these expenses out-of-pocket rather than risking increased premiums.
- Compare Prices. Workers’ Compensation is usually purchased through the private market so prices can vary greatly. And, not all policies are created equal. Compare prices and policies to make sure that you are getting what you need without overpaying.
- Find The Right Insurance Broker. Most of these 12 Cost Saving Tips for Workers’ Compensation in California your insurance broker should be able to provide or assist in these processes. Your insurance broker/agent should make sure you have access to what are important to you and your business. Does your insurance carrier offer claims management services? Will they give you safety suggestions or conduct training seminars? How quickly do they close claims? Does the broker spend time getting to know your company so they can properly identify your needs and create the best policy at the lowest possible price?
- Maintain Good Employer/Employee Relationships. Workers who have a good relationship with their employers are more conscientious and are less likely to make false claims. An employee should feel like they are a valuable member of a team and knows that their employer has their best interest in mind. Healthy workplace morale results in healthy employees, which can greatly reduce insurance costs.
Workers’ Compensation in California is a mandatory expense. But, as an employer, you can put certain things in place to help you save money and guarantee great rates.
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