It’s not until you are hit with a few unexpected workers’ compensation mistakes you really start thinking about how to improve them. When rates are low, many people think “out of sight, out of mind.” Most employers look at Workers’ Compensation as an unavoidable cost of doing business. At Metropolitan Risk Advisory we beg you to avoid these common mistakes:

1. Do not assume lower rates result in lower costs

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Just because your rates were reduced does not mean your Workers’ Compensation cost will automatically go down. Workers’ Comp insurers use a combination of factors to adjust premiums. The first is an experience mod. The experience mod formula calculates a factor that adjusts your cost based on your actual losses (or experience) as compared to other companies in your industry. If your past losses are below average, the insurer gives you a credit rating lowering your premium. However, a debit is applied to your premium if your past losses are below average. Make sure to manage this by having your broker verify the accuracy of your experience mod.

2. Do not think Workers’ Compensation expenses are out of your control

You can reduce your expenses! Cost reduction starts in the hiring process. Execute effective interview techniques and background checks to help ensure the right people are hired. Still, there’s no way to completely eliminate the possibility of injuries in a workplace. Therefore, it’s equally important to have an effective return-to-work program in place to help injured workers return to work as soon as possible and reduce the cost of their claims.

3. Do not neglect cost containment and injury management when Workers’ Compensation premiums go down

Safety should be a focus area at all times. This will not only help your organization reduce the number of claims, but will also keep rates low over the long-term. Make sure to keep an eye on the issues that frequently impact the costs of claims, such as medical care costs and lost wages. Also, remember that open claims mean escalating costs and negative impacts on your mod factor. The bottom line is the preventive actions you take today will save you money in the future.

4. Do not miss the connection between cost containment and worker retention

A large part of whether or not an injured employee returns to work is based on how their employer responds during and after recovery. As mentioned previously an important part of your response is having a return-to-work program that includes maintaining constant contact with all injured workers and their health care providers. Employees that are kept in the loop with periodic phone calls about what is happening at work in their absence are more likely to return. On the other hand, employees that feel forgotten, undervalued and disconnected are much less likely to return. Makes sense right?

Look at Workers Comp as a tool to improve your bottom line. Make a conscious effort to keep your rates low over the long-term. Take the time to talk to an advisor about how to protect your employees while taking advantage of significant savings.

 

Avoiding these mistakes can be very beneficial to you not making any workers compensation mistakes.