In today’s tough business environment, saving every penny and avoiding unnecessary costs can determine whether or not your doors stay open. Plus, we also know that workplace accidents happen. It’s not a matter of IF an accident will happen, it’s just a matter of when that accident will happen.
Below are some of the best ways to save money on your Workers Compensation insurance. Each of these strategies is important. However, in our experience, #1, #8, and #9 will have the most impact in saving you time and money.
1. Shop & Compare…Every Year!
If you are serious about saving money on your insurance costs every year, you must shop and compare. Every year there are new carriers entering into the California Workers Comp marketplace and your existing broker may not have access to some of these new options.
To help ensure you are not missing out on any new options, make sure that your broker is a CIS (Construction Insurance Specialist). If your broker is not showing you 2 to 3 options every year and simply auto-renewing you with your existing policy, you may be paying more than you need to.
2. Join a Construction Association
Construction Associations can provide you with a great opportunity to network with and build relationships with other trades. Other benefits include discounts on products and services that you rely on as a business owner and some associations even offer insurance discounts to their members.
Some of the contractor trade associations we belong to at The Contractors Resource Center include The California Building Industry Association, The National Association of Remodelers, and The Golden State Builders Exchange.
3. Have a documented safety program
The State of California requires that you have a written safety program. A solid safety program also demonstrates to insurance carriers that you take this stuff seriously. Insurers will be more impressed if you give your program more than lip service by documenting regular on-the-job safety training/updates for staff. You should also require that employees sign off that they’ve read and received your program material. Contact us if you need a Safety Program. We can help get you started in the right direction!
4. Have a return-to-work program
Accidents will happen even in the safest work environment. When they do, a return-to-work program can help you contain costs. The longer a claim stays open, the more it costs your insurance company–costs that are ultimately passed on to you. The goal is to close any worker’s comp claim as quickly as possible by getting the injured employee back on the job, even if it’s part-time or reduced duties approved by the employee’s medical provider.
5. Support a substance-free workplace
Employees who use drugs or alcohol on the job cause injuries to themselves and others. They also cost their employers about twice as much in workers comp and medical claims as non-abusers, according to data from the Substance Abuse and Mental Health Services Administration. At a bare minimum, make hiring contingent on passing a pre-employment drug test. You may also want to consider random testing for all employees.
6. Make sure you have the proper job classifications and class codes assigned to your employees
Sad but true. Some insurance brokers are lazy and do not accurately classify workers correctly when they submit your worker’s compensation policy to the insurance company. A mistake in a wrong classification can cost you thousands of dollars in unnecessary costs. As a business owner, you want to ensure that you review the Class Codes that your insurance broker submits to the insurance company on your behalf. This tip is especially important in the construction industry as there are both Class Code ratings and Hourly Wage ratings that will impact how much you pay for insurance.
7. Educate your employees about the difference between minor injuries and reportable incidents
Avoid unnecessary reporting that can create adverse loss ratios on your worker’s comp record. Small injuries like minor cuts or scrapes that can be treated with on-the-job first aid, an office visit, and a follow-up for observation should not be reported.
8. Voluntary benefits may help reduce workers’ compensation claims
Because of the high direct and indirect costs of claims, companies are naturally looking for ways to reduce their workers’ compensation claims. Voluntary insurance benefits could be the answer. Of employers who offer voluntary insurance, more than 50% offer voluntary accident insurance. Of those who offer this benefit, 51% say they have seen a decline in workers’ compensation claims since doing so.
NEW for 2024 – Developed for California Contractors, ContractorGUARD allows you to Reduce & Take Control of Worker’s Compensation Costs by:
- Starting or Renewing your Worker’s Compensation with a Zero Down payment.
- Take Control of your Worker’s Comp payments with a simple Pay As You Use It Plan.
- Simplifying your process of reporting your payroll with an easy-to-use online reporting tool.
- Customized Health & Disability are available – resulting in fewer Workers’ Compensation Claims!
This new program, only available through The Contractors Resource Center, bundles your payroll and your Worker’s Compensation together, allowing you to focus on your business while saving time and money. To get your free ContractorGUARD quote: CLICK HERE