Are Workers Compensation Costs "Hurting" Your Bottom Line

Many businessowners believe that all of their insurance costs are out of their direct control. Well you may be wrong if this is what you believe. One type of coverage that the businessowner can control or influence is their workers compensation costs. Workers compensation reforms of 2007 enacted by Governor Spitzer have driven down the cost of workers compensation insurance. How can your business take advantage of the reduced workers comp costs?? Understnding loss-sensitive premium elements is the first step. Two key factors determine workers comp. premium: manual rates applied to your payroll, and your company's individual accident experience rating modification ("mod"). The experience rating method takes into account that although similar employers pay the same basic manual rates, they have different loss histories and may not have similar commitments to safety. The plan adjusts for those differences by modifying the overall premium paid by the businessowner. If when your losses are calculated and are less than average for your type and size of business the workers comp. board applies a Debit or Credit "mod". Of course a debit means increased premiums and a credit means a lower premium.

Three ways to control your experience mod and lower your premiums are: Make Accident Prevention Your Strategy, Pay Small Claims, and Develop a Formal Safety Plan. The Labor Dept. says that it takes four complete policy years for the experience mod to benefit from reduced claims and better safety. The key to reducing your workers compensation costs is to develop and implement a safety plan for your business. Start small with: machine guarding, housekeeping and OSHA compliance. Most importantly be PATIENT. It will take time to see results, but if done correctly it can results in thousands of dollars of premium reductions!!!!