4 Ways Small Businesses Can Reduce Workers’ Compensation Costs

Workers’ compensation costs extend far beyond the cost of your insurance policy. The costs of a workplace accident also include time lost, attorney fees, disruption to your daily operations and medical costs.

Injuries – no matter how minor or severe – can be time-consuming and costly for any business.

Hardhats help preventing costly injury compensation costs

Here are four ways you can reduce workers’ compensation costs.

1. Make Safety a Priority

Failure to make safety a priority can lead to more accidents and higher workers’ compensation costs.

Instead of looking at safety as an expensive choice, look at it as an essential part of your company’s mission and daily practice. Take care of your employees and foster a work environment that values the safety of its workers.

Offering competitive wages, medical insurance and other benefits will also help attract competent workers who know what they’re doing and will follow through on safety protocols. These benefits may be costly, but they’re not nearly as costly as having to deal with frequent accidents and a high employee turnover rate.

2. Implement a Safety Program

A large percentage of injuries can be prevented. Implementing a safety program can help you pinpoint potential workplace hazards and take care of the problem before an accident or injury occurs.

Yes, it will cost money to implement a safety program, but Safety and Health Magazine says businesses see a $2-$6 return for every dollar invested in accident prevention.

Some states require a written safety program. Even if your state doesn’t have this requirement, taking the initiative to implement a safety program demonstrates your commitment to the health and safety of your employees.

There are many resources available to help you design your safety program, including:

  • OSHA’s On-site Consultation Program, which provides free advice to small businesses.
  • Your insurance carrier. Many carriers provide free safety consultations to their policy holders.
  • Industry templates. Downloadable safety program templates are available online at a reasonable price. These templates are industry specific, which means they will address issues that are unique to your business.
  • Consultants. If you have the budget, you can hire a workplace safety consultant.

Once you have a safety program in writing, you will need to follow through with training to ensure that your employees and managers are following protocol.

3. Act Quickly on Claims

Even with preventative measures in place, accidents can and do happen. How you react to a claim will have a significant impact on the cost of the workers’ compensation claim.

Acting quickly and taking the right actions can help you keep costs to a minimum.

  • When an injury occurs, ensure that the worker gets medical attention immediately.
  • Report the injury to your workers’ compensation insurer as soon as possible.

When your employee is well enough to return to the workplace, offer light-duty work if physical restrictions are in place.

Even when acting quickly, be prepared for injured employees to hire a lawyer to work through the process of filing a workers’ compensation claim.

4. Join a Professional Employer Organization (PEO)

A professional employer organization, or PEO, can help you manage workers’ compensation costs and claims. A PEO can also help you address the various safety challenges your business will face over time.

A good PEO will:

  • Help you choose the appropriate workers’ compensation coverage for your business. In many cases, they can reduce premiums by negotiating with insurance carriers.
  • Resolve claims quickly and efficiently when they occur.
  • Evaluate your company’s safety program and the safety of your workplace.
  • Help you implement a return-to-work program.
  • Work with injured employees on your behalf.

Use these tips to help reduce your workers’ compensation costs and boost employee morale. Remember: Prevention is the key to reducing costs, so focus on safety and taking care of your employees.

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