Workers’ compensation can be a
major expense for company owners. While there is no real way to prevent workers’ compensation costs,
there are many ways to limit such expenses and decrease them in the future.
Employers often look for ways to ensure
safety at a job site and among employees
but often overlook simple ways to reduce
costs, says Jerome Shalauta, a commercial
insurance broker with Westland Insurance.
Many times, the way you treat your
employees and the work atmosphere you
create can help reduce workers’ compensation expenses. Creating a positive work
environment not only reduces these
expenses but increases overall productivity, says Shalauta. Often business owners
need to revert back to the basics when
implementing safety and determining how
to treat employees.
Smart Business spoke with Shalauta
about how employers can work to reduce
workers’ compensation expenses and
increase overall productivity.
How can an employer reduce workers’ compensation costs?
Implement safety. Employers who implement and practice safety measures on a
daily basis have fewer accidents, and
employees may feel more comfortable
coming to work each day.
Create a positive environment. Employees who enjoy coming to work each day
are less likely to file a fraudulent claim or
seek excuses from work when healing
from injury. Satisfied employees want to
come to work each day.
Involve yourself with employees. There
should not be a divide between management and employees. If employees know
you are genuinely concerned, they will feel
appreciated. Employees who are appreciated are less likely to litigate, and litigation
can drive compensation expenses through
the roof.
Hiring practices. Think about the people
you hire and how they will contribute to
the overall work environment.
Compensation or rewards. Offering
employees compensation and/or rewards
when a certain number of days pass without an accident or claim may cause
employees to work more carefully and prevent them from filing frivolous claims.
How can an employer ensure safety and
communicate safety procedures to employees?
Safety is crucial when workers’ compensation is involved. There is a major difference in the number of claims filed in companies that do not implement and practice
safety routinely versus companies who
have safety plans and ensure they are communicated effectively.
Good workers’ compensation carriers
should supply a safety staff that will come
out to your office or job site to evaluate the
site and the employees’ actions. They can
then offer an expert opinion about how
safety can be increased and practiced. It is
important to consider a carrier not strictly
on cost alone but also on what a carrier can
do for the overall safety and claims prevention for the company. Meet with the
experts and let them help you.
Communication is critical. Newsletters,
information postings and regular meetings
can be used to communicate safety procedures. Employers can make these meetings mandatory to ensure every employee
is properly educated.
How should employers treat workers before
and/or after compensation claims?
It sounds so simple but, honestly, the
more you communicate and are involved
with an employee on a daily basis, the better your overall relationship will be with
that employee. A good relationship, a positive work environment and employees
who feel appreciated often lead to employees who will be less likely to file an unnecessary or grudge claim after an accident.
After an injury, you must stay in touch
with the employee. It makes a world of difference if the employee knows you are
concerned and that he or she still has a job
to return to after recovering.
Is there any way employers can protect
themselves against fraudulent or grudge
claims?
There is currently a huge emphasis on
eliminating fraud in workers’ compensation. Limits have been put on attorney
costs in an attempt to prevent excessive
lawsuits. Nuisance settlements — settlements made by employers with employees
out of court — have also been largely eliminated.
Employers also have more control over
the medical attention that employees
receive. This helps ensure that employees
are receiving proper but not excessive
treatment for any injuries.
What can a poorly handled claim cost a company?
This depends on the type of claim filed. A
serious accident can cost a company a few
thousand dollars if it is handled properly. If
it is not handled correctly, the costs could
be debilitating. Employers must realize
that this is not just one employee and one
claim. Rather, this claim will affect your
Experience Modification (X-MOD) that is
calculated by the Workers’ Compensation
Insurance Rating Bureau (WCIRB). This
may mean increased workers’ compensation.
JEROME SHALAUTA is a commercial insurance broker with
Westland Insurance Brokers. He can be reached at (949) 553-9700.
