An effective safety program gives your company a competitive advantage over one with careless operations. Safety awareness lowers your workers’ compensation rates through premium rebates and discounts, and better rates from less frequent and less severe claims.
“I can walk into a manufacturing plant and sense whether the company has a strong focus on their operations and safety. And, nine out of 10 times, I’m correct,” says Cliff Baseler, vice president at Best Hoovler Insurance Services Inc., member of the SeibertKeck Group.
Smart Business spoke with Baseler about how safety programs and a safety culture factor into decreasing your workers’ compensation premiums.
How can you use safety to take advantage of workers’ compensation rebates and discounts?
As one of four states that don’t allow employers to buy workers’ compensation from private carriers, Ohio and its Bureau of Workers' Compensation (BWC) have a number safety programs (www.OhioBWC.com/employer/programs/safety). The three fundamental ways to get credits to your basic rates, depending on whether you have a basic or advanced safety program, are the:
- Drug-free safety program, a premium discount of 4 to 7 percent for implementing a program that promotes occupational safety and addresses the use and misuse of alcohol and drugs in the workplace.
- Safety council rebate program, a 2 percent rebate for active participation in a safety council, as well as another 2 percent possible based on the frequency and severity of your workers’ compensation claims.
- Destination excellence program, up to 3 percent refunded based on industry-specific safety discounts.
Additionally, based on your company’s total losses and their severity, you get experience modification — a credit, or debit if you’ve had claims — to your base rates. The BWC also administers workplace wellness grants, which by establishing a more healthy and aware workforce can reduce the frequency and severity of claims in the future.
Your property and casualty commercial insurance carrier is another source for safety assistance to help reduce claims. The national carriers already provide out-of-state workers’ compensation, so they have programs and information that your company may be able to take advantage of as a client.
How can you ensure employees actually follow your safety practices?
Many business owners examine their prior premiums and rates to see the total savings from BWC credits, rebates and discounts, and then share half with employees as a safety bonus. Employees know if they stay safe the employer will, for example, hand out gift cards. Also, if a department has no workers’ compensation claims for a certain quarter, the boss could buy everyone pizza.
Another incentive is posting accomplishments — the sign that says ‘We’ve had X consecutive days of no workers’ compensation losses.’ You might not think it works, but employees don’t want to be the one person to mess up, so they are more aware and take extra time.
Your safety committee should be helping with education and awareness. First, you train the trainers at monthly meetings, such as bringing in a loss control engineer or practical exercises like the proper way to lift a 100-pound object. Then, the committee members go down to the specific departments, which already should have safety resources for individual jobs.
How else can you institute a safety culture?
The written safety plan needs to be reviewed by employees, so make employees sign a statement that they read it. Post safety rules in relevant places — the BWC can provide posters. When new employees go through safety training, make sure you’re refreshing the memory of existing employees. Keep your job analyses current and match the right employees to the right tasks. An improperly trained employee who’s lifting and bending all day is an accident waiting to happen.
It’s only after you establish a strong safety culture to keep frequency and severity of claims down that you can think about the next level where you can get in a group or a retrospective rating program to earn your own rates.
Cliff Baseler is a vice president at Best Hoovler Insurance Services Inc., member of the SeibertKeck Group. Reach him at (614) 246-7475 or firstname.lastname@example.org.
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