Category: Business Review 360

FOUR COMMON MISTAKES EMPLOYERS MAKE REGARDING WORKERS’ COMPENSATION

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.

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. Cost reduction starts at the hiring process. Initiate effective interview techniques and background checks to help ensure the right people are hired for the right jobs.

3. Neglecting or de-emphasizing cost containment and injury management during low rate periods. Safety should be an unyielding focus at all times. This will not only help a company reduce their claim numbers, but also keep their rates low over the long term. Employers need 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 to the company’s modification factor.

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.

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