Experts credit several reasons for the upward pressure on workers’ compensation premiums. As the cost of medical treatment skyrockets, the severity of workers’ compensation claims rises as well. Higher disability payments, a generous industrial commission, and employee attitude also are believed to be factors to the rising costs.
Employers have access to tools that can reduce the severity and frequency of workers’ compensation claims. First and foremost is pre-employment screening. There’s no substitute for a comprehensive pre-employment background check. Many employers would benefit from pre-employment physical and functional capacity exams as well. Certain vendors specialize in providing thorough background checks and can suggest a comprehensive series of capacity tests for potential employees. There are initial costs associated with an effective pre-employment program, but workers’ compensation premiums that increase by thousands of dollars because of a single claim isn’t an attractive scenario. Knowing your potential employees before they’re on the payroll is critical.
An equally important tool in safeguarding your workers’ compensation loss ratio is having an early return-to-work program. If an employee is injured and can’t resume his or her normal duties, it’s essential that an employer find light duty. If the light duty task doesn’t warrant a full wage, the insurance company would be responsible for the additional wage up to the disability rate. The key factor is getting the employee back to work as soon as possible. If employees are assigned a mundane task as part of their rehabilitation, they’re much more motivated to return to full duty. A proactive loss prevention program is an outstanding way to help control your workers’ compensation expenses.
These are just some examples of helpful hints in controlling the costs of your workers’ compensation insurance, which could have a negative impact if left unmanaged. Again, I encourage you to spend time with your trusted insurance professional to review the need for the above-mentioned services and others that pertain to your specific business. IBI