For many businesses, protecting their employees through a Workers Compensation policy is a necessity, however, often times this line of insurance can be a rather large expense. In fact, for many business owners, the Workers Compensation policy may very well be the most expensive line of insurance that they purchase annually. Knowing this fact, it is natural for an employer to consider regularly shopping their Workers Compensation rates with the intentions of reducing insurance cost. The mistake many employers make is simply neglecting to communicate the importance of safety, training, and educating to avoid Workers Compensation losses after a Workers Compensation policy is purchased. After all, if an employee is injured on the jobsite, this specific policy will protect them and pay for it, right? Isn’t that what it’s there for? Unfortunately, many business owners fail to grasps or consider the indirect cost that can arise from a loss or claim. Furthermore, typically these additional costs, which businesses can experience, are not protected on their standard Workers Compensation policy. Examples of an indirect loss may include
-The Increase of an Experience Modifier. If your business qualifies for an experience modifier, experiencing a loss or claim could very well increase this modifier (assigned by the NCCI) ultimately causing a Workers Compensation increase for up to 3 years!!
-Cost to clean up, repair or replace the items incurred by the accident
-Time and Labor that is used by Managers, supervisors, or even fellow employees to assist and handle the claim (this not only includes workers compensation paper filing for medical invoices and doctor bills but also the employee that may drive to the injured to the ER and wait for a diagnosis all while on the clock)
-Potential loss of productivity and loss of income due to absence of employee
-The cost of Hiring and Training new workers to fulfill the duties and obligations the business may require to be completed while the injured worker is absent or even paying overtime fees to existing employees for the same reason
Additional costs may even include legal fees, third party liability expenses and potential OSHA fines. Cost savings, when it comes to Workers Compensation insurance is not just based on “best price” of a Workers Compensation policy. The best way to reduce cost and save money on any workers compensation policy is to simply reduce and avoid losses for the business. In a subsequent article, Snotherly Insurance will offer 5 tips every business can enforce in order to reduce their loss claims activity.
Snotherly Insurance Agency does specialize in offering our business and commercial customers Workers Compensation solutions including insurance policies, advice and service as well as payroll and audit assistance
Here we will be publishing articles, tips and information regarding insurance on a regular basis. Make sure to tune back in to see our first blog very soon!