Believe it or not, the cost of workers’ compensation insurance has always been within your clients’ control. By having them take some time to understand just how the system works, how premiums are calculated, and what options are available, you’ll be able to help them to keep their payments at a reasonable cost. Simply by implementing a company-wide safety program that reduces the number of workers’ comp claims they have they’ll be able to reduce costs with lower premiums. Most workers compensation brokers will agree that this is a fact.
Regardless of the industry they work in, they need to make sure that their employees have and utilize appropriate safety equipment wherever needed. Staging regular inspections of their facilities for safety hazards and looking for other ways to stop accidents before they happen will also pay dividends. For instance, just training employees in the correct way to lift heavy objects is a worthwhile example, since back injuries are common to workers’ comp claims. In an office scenario, learning the right way to work on computers will help to reduce claims for repetitive stress injuries.
Check that workers’ classification is correct
Check to make sure that the company and employees are properly classified, since misclassification is one of the most common reasons for overpaying on workers’ compensation insurance. Non-hazardous jobs have much lower rates than hazardous ones, so by misclassifying even one worker into a higher hazard level job, the total premium may increase significantly.
Workers’ comp premiums are generally based on regular payroll figures, excluding overtime. Some states allow deductions of overtime pay to straight time for the purpose of figuring payroll, but you should have your client check with the state office of employment to see if those guidelines are correct.
Remember, the quicker an injured worker returns to work, the lower the disability claims costs may be. Modify the injured worker’s assignment upon return (or put him or her on light duty), but that’s really a small price to pay for helping an employee returning to work.
As a workers compensation broker you should discuss with clients available plans that use managed medical care to treat injured workers. Most states allow HMOs, PPOs and other managed-care providers to handle workers’ comp claims.