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5 Strategies to Reducing Workers' Compensation Costs

Workers’ Compensation Insurance is, many times, one of the highest single expenses in an organization. What most businesses don’t realize is that there are many strategies they can employ to reduce the overall cost of their Work Comp program by controlling claims and their Experience Modification Factor. Now, this isn’t a post on how the Experience “Mod” works so I won’t dive too deep into the mechanics behind it. However, suffice it to say the less claims you have the lower your mod will be. 

Think of Workers’ Compensation as simply a vehicle to finance the cost of injuries. After you have a claim your Mod is going to adjust accordingly costing you more in premium dollars. In essence, you are financing that injury over a 3-year period. Because of that fact it is imperative for business owners and managers to have strategies in place to reduce their Workers’ Compensation claims and keep overall costs down. Here are 5 recommendations on reducing Work Comp costs.

1)    Build a Solid OSHA Program

  • In most organizations, OSHA is a bad four letter word. However, having a proactive OSHA Program will not only keep you in compliance with OSHA but will also help in reducing and eliminating Work Comp Claims.

2)    Integrate Programs into Daily Operations

  • Having solid programs and policies alone won’t get results. They must be built in the fabric of the organization to really make an impact.

3)    Investigate all Injuries and Illnesses

  • Utilizing in depth accident investigations gives you the ability to really drill down to the root cause of a Work Comp claim. This allows you to adjust your policies and procedures accordingly to avoid the accident in the future.

4)    Provide Ongoing Training to all Employees

  • Ongoing training is key to a successful work comp cost reduction strategy. The business and working environment change regularly which means it is important to provide employees continuous training on the policies and programs in place.

5)    Audit for Continuous Improvement

  • Always be improving. As mentioned above, the business environment is constantly changing and the business owners that can change along with it will have the most success.

For a more in depth look at these five strategies open our Work Comp Insights bulletin on exactly this topic.

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