While businesses in certain industries, such as construction or manufacturing, handle riskier activities than others, it is possible for employees in any position or industry to sustain an injury or illness on the job. When accidents occur, employers may face a variety of direct and indirect costs, including medical expenses, lost productivity, potential lawsuits, and expenses associated with replacing an employee who is unable to return to work. In this article we explain what businesses need to know about workers’ compensation.
Workers’ compensation insurance—commonly known as “workers’ comp”—serves to protect both employers and employees by covering the costs of employees’ medical care and wage replacement if they suffer a job-related injury, regardless of who was at fault. In exchange, workers’ comp generally limits employees’ rights to sue their employers. Unfortunately, many small business owners erroneously believe that they do not need workers’ comp and think of it as just another superfluous business expense. In reality, many states require businesses with at least one employee to carry workers’ comp insurance, although specific regulations vary by state, industry, and size of the business. Some states offer workers’ comp through a state insurance fund, while in others, employers must purchase it from private carriers. Even when workers’ comp is not required, all employers should consider it as an important tool to help protect their bottom lines.
How can employers reduce workers’ comp costs?
For any business, the key to minimizing workers’ comp costs and maintaining a healthy, productive workforce is to prevent accidents in the first place. The following steps will help employers improve workplace safety, avoid workers’ comp claims, and reduce the costs of insurance premiums:
- Understand the workers’ comp laws in your state. One of the first steps employers should take is to determine whether their state requires them to carry workers’ comp insurance. If so, it is essential to have it—or else they will risk being subjected to hefty fines in addition to the high out-of-pocket costs they will incur if an employee is injured on the job. It is also important to understand whether your state has a workers’ comp insurance fund or whether you must purchase coverage from a private company, as well as which ailments and benefits your state requires the insurance to cover.
- Review safety standards published by the Occupational Safety and Health Administration (OSHA). OSHA has established detailed safety guidelines for a variety of industries, including construction, healthcare, and agriculture. These guidelines address training, equipment, and best practices for injury prevention based on the types of hazards that workers in different industries are most likely to encounter. Employers should visit https://www.osha.gov and periodically ensure that their workplaces are compliant with OSHA’s standards.
- Hold regular safety training sessions. Regardless of your industry, it is essential to educate employees about the unique hazards they may encounter on the job, how to avoid them, and what to do if an accident occurs. For example, while “desk jobs” may not seem particularly risky, educating employees about how they can avoid repetitive motion injuries—which are common among people who use a computer for several hours a day—may help prevent unexpected workers’ comp claims from office workers. To be effective, safety training sessions should be interactive and customized for the workforce’s specific needs.
- Have clear, easy-to-follow procedures in place outlining the steps employees should take in the event of a workplace accident. For example, all employees should know where first-aid equipment is stored, whom they should notify if an injury occurs, and the first steps that should be taken to remove the dangerous condition that led to the accident.
- Conduct workplace safety inspections periodically to identify—and then rectify—potential hazards. Consulting a qualified third-party firm, such as Creative Business Resources, to provide these inspections is an effective way to ensure objectivity and legal compliance.
- Implement a return-to-work program, which can help to reduce workers’ comp costs and boost productivity by enabling injured employees to resume their duties as soon as possible. Return-to-work programs must comply with a variety of laws, such as state workers’ comp statutes, OSHA regulations, and the Americans with Disabilities Act (ADA), which requires employers to make reasonable accommodations to allow workers to perform their job duties in light of injuries or other disabilities. The steps involved in a successful return-to-work program typically include identifying the essential functions of the employee’s job, determining which activities must be restricted based on a physician’s assessment, and making accommodations to allow the employee to perform as many of their essential job functions as possible while they are healing. For example, employers may provide recuperating workers with an ergonomic work station or permit them to work from home as reasonable accommodations under a return-to-work program.
As employers in all industries strive to minimize workers’ comp expenses and comply with laws governing workplace safety, consulting an expert like the team at Creative Business Resources can improve results and prevent accidents from happening in the first place. CBR offers an array of services designed to help businesses keep their employees safe and their workers’ comp costs low. For example, we provide employee safety training and can assist your organization with developing specific protocols to follow in the event of an injury. We also partner with workers’ comp insurance carriers that offer quality plans at affordable rates. Additionally, we provide aggressive in-house claim management and work closely with carriers to ensure that the costs of claims are contained, injured workers receive the care they need, and return-to-work programs are implemented as soon as possible. As a result, CBR’s clients enjoy lower workers’ comp premiums and declining experience modification rates (EMODs).
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(Sources: https://www.thebalancesmb.com/return-to-work-program-benefits-4124072, https://resources.ehealthinsurance.com/small-business/avoid-workers-compensations-claims, https://www.business.com/articles/6-things-you-need-to-know-about-workers-compensation-insurance/).