When you own your own small business and have at least one employee working on jobs besides yourself, you are required by law to carry some type of workers’ compensation insurance. The average cost per hour in private sectors across the board is around $2.30. Today’s business environment has many businesses needing to find every way possible to save money. There are some ways businesses can avoid unnecessary costs to help keep their business open. Below are some great tips businesses can use to try and save a few dollars on their required workers’ comp plans.
Get Group Ratings
One way to save good money on your workers’ comp insurance is to obtain a group rating. This is similar to the way group rating works with healthcare insurance. Even when you have a small number of employees working for you, you might be able to take advantage of joining a trade association or another industry that has more than 300 employee members and more than two businesses. These businesses should have more risk than your business to be a wise decision.
Ask For Advice From Insurance Provider
To save money in the long run, ask your insurance company representative or agent to regularly visit your workplace to identify any potential safety hazards. When you get those hazards fixed, be sure to document how you remedied those problems and show them to your insurance company. This will allow them to offer you better rates on your insurance.
Keep Well-Documented Safety Program
Depending on the state you have your business in, you may be required to keep a well-documented safety program. Even if your state doesn’t require it, you can still benefit from having one put into place. Studies have shown that for every dollar a business invests in workplace injury prevention, the ROI results can be up to six times that amount. Solid safety programs can also show your insurance company that you take the safety of your employees seriously. They will be impressed when you show them the safety program you have implemented. Be sure to have all employees sign a form saying they have read and fully understand everything written in the safety program.
Create A Return-To-Work Program
No matter how safe the environment you create for your business and employees is, accidents can still happen. When they do happen, it can save you money by having a return-to-work program in place. The longer a workers’ comp claim stays open by the insurance company, the more money it will cost your business. Your goal should be to get your injured worker back to work as soon as possible and have the claim closed, even if your worker can only come back part-time or is only able to perform light duties. Keep in mind all work-related tasks will have to be approved first by your medical provider.
Run A Substance-Free Work Environment
Employees who use alcohol or drugs while working can be a huge risk to your business. They are more likely to cause injury to themselves or others. They can end up costing your business twice as much in medical claims and workers’ compensation than employees who do not use substances. Before you hire anyone, have them agree to a pre-employment drug test and random drug testing while continuing their employment.
Have Proper Job Classifications Set In Place
For each employee you have, be sure you have detailed, accurate and complete job descriptions created. This will make certain everyone knows exactly what their job responsibilities are and will not step outside of their responsibilities. For example, don’t let a receptionist carry heavy boxes in the back room. If they get hurt in the process, you could end up paying substantially more for workers’ comp. Additionally, be sure you know your state’s rules regarding independent contractors and worker’s compensation benefits.
Educate Employees About Reportable Accidents
Take time to teach your employees the difference between reportable accidents and minor injuries sustained while working. If your employee wants to report getting a papercut, this could end up creating a loss ratio for your insurance record. Let employees know there are certain injuries that can easily be treated with the on-site first aid kit.