MASTERING MANAGEMENTLower Your Workers' Comp Costs OVERLAND PARK, KS - Every business needs workers' compensation insurance, but the premiums don't have to eat up your profits. According to
Zurich North America Commercial, the key to controlling workers' compensation costs lies with the business owner, manager or operator. The group offers these tips to help you lower your costs.
1. Use good hiring practices. Always check a job candidate's background before hiring, and require prospective employees to complete a detailed application form. Then, check with a qualified local attorney to ensure you take all legally required actions prior to obtaining and using any of the following information about your applicants: * Criminal records. * Credit balances. * Previous employment references. * Motor Vehicle Reports. * Pre-employment drug screens.
2. Promote shop and workplace safety. Develop a positive employee attitude toward safety: * Set a good example by practicing good, safe work habits. * Allow employees to report unsafe work practices without fear of reprisal. * Be accessible to employees. * Set up and attend regular safety meetings. * Make sure good housekeeping rules are followed at all times. * Enforce safety rules. * Train and motivate employees to think and work safely. Safety meeting topics should include automotive lifts, blood-borne pathogens, compressed gases, driver safety and flammable liquids. Employees should learn about the physical and health hazards of materials they work with, and how to protect themselves. Employees should know how to use all your shop's equipment properly and what personal protective equipment is available to them. In addition, all employees should know exactly what to do in the event of an emergency.Each new employee should also attend a safety orientation when he or she starts.
3. Allocate loss and insurance costs. This is a good tactic for larger businesses, says Zurich. These costs can be organized by location or department. Some companies make these costs part of the manager's performance review and pay plan to increase awareness of loss costs.
4. Designate physicians or clinics. If permitted by law in your state, this tactic can help lower medical costs for your company. Your insurance carrier can provide you with a directory of preferred medical providers located near your business.
5. Implement a modified-duty or transition-to-work program. Assuming the employee is able to work, this type of program can bring benefits not only to your business, but to your employee, too. These programs can assist in the reduction of workers' compensation losses and reduce the possibility of fraudulent claims. In addition, they aid the employee with productive work and can help them recover faster, while providing better productivity for your business.
6. Provide an array of employee benefits. Providing a number of choices for employees assists in the reduction of workers' compensation losses. It can also reduce the risk of fraudulent claims.
7. "Call in Three." Report all workers' compensation claims within three days of the incident. It's good for everyone because it provides better service for your employees and can help reduce costs for you.
8. Know your experience rating. Workers' compensation rates are set by the states. The states establish "manual rates" for employers in various types of business. This sets a baseline rate, which undergoes many calculations - including the "experience rating." The experience rating: * Compares your losses to the average risk of similar businesses. * Is usually computed from the latest available data from the last three years. * Is designed to give you some influence on your final premium. * Provides incentives for safety programs. * Promotes occupational health and safety. This information and more is available to you on the National Council on Compensation Insurance (NCCI) Web site at
www.ncci.com. Visit the "Introduction to Workers Compensation" section.
9. Help stop fraud. Although most claims are legitimate, too many are inflated or fraudulent. You don't want to pay for that. As an employer, you can assist the investigative process at its most crucial point: when the claim is first reported to you. Red flags for potential fraud include: * The injured employee is disgruntled or facing imminent firing or layoff. * The injured employee took unexplained or excessive time off prior to the accident. * The injured employee has a history of reporting subjective injuries. * The accident has no witnesses. * Fellow workers hear rumors that the accident was not legitimate. * The accident occurs shortly after the employee reports to work on Monday. * The accident occurs in an area where the injured employee would not normally be working. * The incident is not promptly reported to supervisor. * The details of the accident are unusually vague. * The nature of injury is not consistent with the facts. Zurich advises that no one indicator alone is necessarily suspicious. Even the presence of several indicators, while suggestive of possible fraud, does not mean fraud has definitely been committed. Such a determination can only be made after a thorough and complete investigation.
10. Other resources. * Your insurance carrier - talk to your account executive. * Outside safety consultants. * Industry associations - many publish safety information for their members. * Government and private Web sites. The Occupational Safety and Health Administration (OSHA) offers a "Small Business Compliance Guide" with safety checklists. Visit
www.osha.gov.
(Source: Zurich
North America Commercial) 
