8 Ways Safety Programs Impact Workers’ Comp Insurance Costs
Any business worried about workers' compensation insurance costs can rely on one surefire strategy for reducing overall claims and the cost of those claims that are made: Workplace safety programs.
Safety programs focus on making the workplace a safer place both on and off the clock. From icy parking lots to heavy work machinery to safely routing cables in the office, the result of a safety program is a safer work environment. This will reduce the risk of injury and, therefore, both the frequency and severity of workplace injuries or illnesses that occur.
If your goal is to take good care of your people and reduce workers’ comp insurance costs, let's take a closer look at the influence that a well-implemented safety program can provide.
1. Fewer Accidents, Fewer Claims
Safety programs that can effectively prevent accidents and injuries will reduce the total number of workers’ compensation claims that are filed. When fewer claims are filed, your business will have a lower risk rating, and your policy will be called upon for fewer settlements. In the eyes of your insurance carrier, this means that your policy presents a lower cost profile and that savings are passed on to you in the form of lower premiums.
The fewer accidents that occur over time, the lower workers’ comp premiums you will need to pay. This is one of the many natural rewards for maintaining a high degree of workplace safety.
2. Less Severe Accidents, Smaller Claims
It is nearly impossible to reduce the risk of accidents to 0%. However, a good safety program that compensates for all possible dangers can make those few accidents much less severe. For example, A sturdy hand railing and padded traction carpet on concrete stairs can ensure that a little fall results only in a sprain, and not a concussion or a broken bone.
Employees whose injuries are less severe due to a safer work environment need fewer medical expenses and will lose fewer wages due to time spent in recovery. This means that the workers’ compensation claims that are filed are for lesser injuries and, therefore, require smaller settlements. In other words, lower costs per claim.
Lower claim costs can lead to more favorable insurance premium calculations, as your policy will not cost the insurance provider as much per claim.
3. Prevention Improves Your EMR
Implementing safety programs can improve your Experience Modification Rate or EMR.
The EMR is a factor used to calculate workers’ compensation insurance premiums. It is based on the company's claim history compared to the industry average. A strong safety program that reduces the frequency and severity of claims can reduce your EMR factor, which goes into the calculation for your annual workers’ comp insurance premiums.
This bonus may be applied both when your safety programs are implemented and after the results begin to significantly reduce the frequency and severity of workplace injuries.
4. Fostering a Culture of Workplace Safety
When implementing a comprehensive safety program, the entire staff gets involved. Companies often appoint safety officers and provide rewards and incentives for employees who go the extra mile to keep the workplace safe and watch out for their fellow workers. This process in itself will create and encourage a culture of safety among employees, which can lead to a group attitude of proactive safety.
Employees will work together to identify and mitigate hazards and will help each other with dangerous tasks to reduce the risk of injury. Some may even step forward to propose improvements to procedures and workplace design.
This cultural shift will not only contribute to fewer accidents, but it also engage employees in the safety process. It can potentially lead to innovations and improvements that further reduce workplace risks and the associated costs.
5. Savings Through Regulation Compliance
Safety programs often start by using regulations as a baseline. This is excellent for companies looking to save money, as adhering to occupational safety and health regulations can help you avoid fines and penalties for accidental non-compliance.
This allows you to enjoy safety from penalties while reaping the benefits of the safety best practices already built into the regulations. These regulations will help you prevent both workplace injuries and illnesses, thus providing a positive impact on your workers’ compensation costs.
6. Morale and Productivity
When employers implement safety programs, it helps employees feel valued and protected. Employers who go out of their way to keep employees safe foster loyalty, morale, and higher productivity. Employees will work harder and more attentively for employers who care.
This not only benefits the company's bottom line but also nurtures a more engaged and less accident-prone workforce. When your team is more committed, they are less likely to overlook risks or get injured, which will reduce your workers’ comp claims and improve costs.
7. Sick Leave and Safety
Since the Pandemic, sick leave has become an equally important part of workplace safety programs. When employees feel secure taking days off when they are unwell or contagious, they are less likely to work while under the weather or to get others sick. Sick leave also encourages employees to go to the doctor when symptoms arise, seeking preventative care to catch illnesses early.
This can prevent workplace-related illness and accidents caused by employees coming in to work while too ill to perform safely, therefore reducing workers' compensation claims for both accidents and illness.
8. Return to Work Advantages
Return to work (RTW) programs are part of a comprehensive safety program and are designed to help rehabilitate workers after an injury. RTW programs can reduce the length of a worker's need for workers’ compensation benefits because they can begin earning safely during their recovery process. A good return-to-work program can also keep employees engaged and even facilitate quicker recoveries by minimizing the need for long-term disability.
By minimizing the length of time for temporary disability claims, RTW can significantly reduce the cost of workers' compensation insurance, even for claims on severe injuries.
Take Control of Workers’ Comp Insurance Costs with Safety Programs
Effective safety programs are a critical component in managing and reducing workers' compensation insurance costs. They not only create a safer and more productive work environment but also have a direct financial benefit through lower insurance premiums and reduced costs associated with workplace injuries and illnesses.
Explore how Alloy Employer Services can help you take control of your workers’ compensation costs with safety program planning and proactive claims management. Get a zero-commitment, free analysis of your safety program and workers’ compensation claims procedure. Alloy can start improving your workers’ comp claims cost right away.
