4 Ways to Reduce Workers’ Compensation Claims
Any business that has witnessed their Workers’ Compensation rates creeping up year after year, certainly understands that claims are the culprit behind policy increases. The average claim amount continues to increase as the cost of health care, and diagnostic testing continues rising.
As employers sustain continued increases in the cost of doing business, the fight is on to realize every profit dollar.
In some areas of the balance sheet, there may be little that can be done to reduce costs and increase profits so the employer must pass the additional costs on to the consumer and hopefully remain competitive.
But in other areas, there is a way to reduce costs, especially the monstrosity known as Workers’ Compensation.
Claim Reduction Results in Lower Rates
As we know, most states control workers’ compensation rates, which are set according to the class of business. When a business knows their costs of workers’ compensation in advance, they can set their prices for services and products accordingly. But when they experience claims during the year they are subject to rate increases resulting from claims that are filed. Knowing this, the employer’s best defense will always be a great offense, and that can be accomplished by implementing Physical Abilities Testing (PAT).
- Pre-Employment Tests – It makes very good sense that a worker who may not be physically capable of performing basic job responsibilities is more likely to experience on-the-job injuries than a worker who is physically capable of easily doing the job. Implementing a pre-hire physical abilities test can help the employer make certain that the prospective employee is physically capable of completing the physical tasks associated with the position. The test should be based on the specific tasks related to the job and be administered after a conditional employment offer has been made. If the employee fails this portion of the PAT, the employment offer can be rescinded.
- Pre-Transfer Testing – Just because an employee can easily lift 50 pounds doesn’t necessarily mean that they can also regularly walk 300 yards from one end of a warehouse to another. Employees that are being considered for transfer to another job with different physical demands should also be tested for physical abilities specific to the new tasks required following the transfer.
- Re-Testing – Physical abilities can change over time, especially for employees that have aged or put on weight during their employment. In order to make certain that current employees remain physically able to complete employment-related tasks, re-testing over time will ensure that your employees will remain fit for the tasks they’re expected to perform.
- Tests due to Reasonable Suspicion – Employees returning from leave due to health reasons may not be as physically fit as they claim so a reasonable suspicion should lead to physical testing to make certain they are still physically able to complete work-related physical tasks. An employer owes it to the employee to make certain they are physically able to safely perform their duties. PAT testing will allow both parties to confirm this and can also protect other workers in the workplace.
A well-planned physical abilities testing program that is used consistently in the workplace can reduce workers’ compensation claims resulting in stable rates year over year. PAT has shown to be cost-effective and has improved the ROI many times over.
It Never Hurts to Shop Your Renewal
If your business is suffering from outlandish workers’ comp rates because of past claims, maybe it’s time to shop around. Fairbanks Insurance Brokers are known nationally for our ability to drive the hardest bargain with the companies we represent. You can get a quote on your workers’ compensation insurance plus any other policies you’d like us to quote for you…
Here is What We Recommend
General Liability: Contractors General Liability will be the foundation of protection for your business. The coverage will respond if you or your employees are found liable for bodily injury, property damage, or have a products/completed operations complaint. The coverage also covers defense costs for your business to respond to any lawsuits brought by a third party.
Workers’ Comp: Many states will require contractors to provide workers’ compensation coverage for their workers before they can begin a project. Accidents will happen at the job site that can result in an employee becoming injured and missing work. Your workers’ compensation coverage will provide financial assistance for medical expenses and lost wages.
Surety Bonds: It’s very likely that your state will require you to be licensed before you can begin operations. Most states and customers will require contractors to offer a license or surety bond before you are allowed to bid on a job or begin working.
Commercial Auto: Typically, most contractors will have light and heavy vehicles that require commercial auto insurance to make certain their vehicles can be repaired or replaced in the event of an accident, vandalism, or theft.
Tool Coverage: Also known as Inland Marine Insurance, this policy will provide for reimbursement for expenses to repair or replace tools and equipment. Your tools represent an important part of your livelihood, so we always encourage carpentry contractors to consider this valuable coverage.
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