Most employers look at Workers Compensation as just another necessary evil and unavoidable cost of doing business. It’s usually one of those out of sight, out of mind things when rates are low. It’s not until an employer is hit with a rate hike that they really start to give some thought to their Workers Compensation rates.
Employers need to constantly look at Workers Compensation as a tool to improve their business’s bottom line, and they certainly need to make an effort to keep their low rates over the long term so that they can take advantage of some significant savings.
Here are four common mistakes made by employers that frequently deter their Workers Compensation savings:
1. Assuming that lower rates equate to lower costs. Don’t make the faulty assumption that your cost will go down automatically just because your rates have been reduced. Workers Compensation insurers use an experience modification factor to examine the actual losses incurred by the insured company and establish cost. The actual losses are compared with other companies in similar industries.
2. Believing that employers have little control when it comes to the expense of Workers Compensation. Employers know they’ve got to have Workers Compensation insurance. However, this acknowledgment shouldn’t lead to an employer thinking they’ve got to pay excessively for it; employers don’t and shouldn’t.
3. Neglecting or de-emphasizing cost containment and injury management during low rate periods. Safety should be an unyielding focus at all times.
4. Not making the association between cost containment and worker retention. Studies have shown that fewer accidents occur among skilled workforces, but even skilled workers can have an accident. A large part of whether or not an injured skilled employee returns to work is based on how their employer responds to them during and after recovery.
Contact Duncan Financial Group in Irwin, Pennsylvania at 724-863-3420.