Every company owner knows it’s important to pay your workers’ compensation premiums on time and in full. This can be a huge financial burden for many companies, especially start-ups and smaller, independently owned operations. Failure to pay your premiums can result in steep fines, penalties, and even jail time depending on your jurisdiction.
As a business owner, you cannot do much to change the risks associated with your industry, nor can you alter the premiums assigned to employee classifications. However, you can take steps to reduce your experience modifier.
The modifier is a number representing your company’s loss over time compared with others in your industry. Businesses that have lower modifiers tend to pay lower insurance premiums. So how to reduce workers compensation premiums starts with your experience modifier.
One of the best things you can do to lower your experience modifier and reduce your premiums is to create a safety-first policy. Invest in hiring outside consultants to train your staff and consult with you on recommended safety upgrades. Make sure that employee safety training happens often and is mandatory, with consequences imposed for employees who skip out on the training.
These types of programs naturally reduce the frequency and severity of workplace injuries. In turn, your modifier decreases. It also shows insurance companies that you are taking safety seriously. If your budget allows, consider offering certification-based safety courses, giving your employees an extra incentive to show up and pay close attention. This is a good start on how to reduce workers compensation premiums.
Retention of employees after they have taken medical leave is another way to reduce your insurance premiums. These programs give your employees support and assistance throughout the return-to-work process, encouraging them to come back as soon as they are medically capable of doing so. Return to work programs often provide injured employees alternate jobs at the same location and same rate of pay, to keep them working throughout their recovery where appropriate. For example, a factory floor worker who injures their leg can always help out in the office by answering phones and completing data entry until their injury has fully healed.
Certain states have programs designed to improve workplace safety. You can enroll in these programs, and upon successful completion, you may receive a reduction in your premiums. The type of program available to you depends on your location, industry, company size, and needs. For example, in some states, transport companies that conduct regular drug and alcohol testing are subjected to lower premiums than those that do not. Contact a reputable workers compensation insurance agent today to learn more.
Joining a Professional Employer Organization, or a PEO, is another great way to save money on your workers compensation premiums. Membership in these organizations is usually only reserved for companies with high safety ratings, so be sure you start working on the other recommended steps early on.
PEOs provide companies with assistance in many insurance areas, including the best plan coverage to select, how to evaluate your current safety program, and the best way to manage your professional relationship with any injured employees. They can help you keep employee morale high throughout an injury, while reducing the length and cost of their workers compensation claim. This is another good way on how to reduce workers compensation premiums.
Finally, if you are hoping to lower your premiums, look for a skilled insurance broker. One who is an expert with workers compensation can help identify holes in your current safety measures, while also suggestion areas for improvement. Acting upon their advice can lower your premiums, saving your company a lot of money.
Agents can also help you find outside safety consultants to speak with your staff and provide high-quality safety training. Never sign up for an insurance plan without first consulting with an experienced broker. They have years of experience in the field and can help save you money without exposing you to any increased risk.
You also should read up on uninsured subcontractors workers compensation issues.
We hope this article on how to reduce workers compensation premiums has been informative. If you have questions about how you can lower your own premiums, contact a qualified insurance broker. They can explain how your modifier affects your rates and give you tips on how to lower it tailored to your unique situation. Knowing how to lower your premiums can help you stay in business longer, while offering your staff members a much safer working environment as a result.
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