A Checklist for Controlling Workers’ Comp Costs

From medical costs to legal expenses to increased annual workers’ comp premiums, workplace injuries have a significant financial impact on companies across all industries. 

To help, we’ve compiled this checklist of some of the main areas employers can consider when working to lower workers’ comp costs. Overall, a strong focus on preventing injuries from happening and responding properly when they do are top considerations.

🔲 Workplace Safety Program

The best way to save on workers’ comp costs is to prevent injuries from happening in the first place. Establishing a workplace safety program should be the first step employers take to reduce the likelihood of injuries and control losses. 

A workplace safety program ought to be documented and communicated with employees so they are aware of standard operating procedures for negotiating workplace risks. It might include:

  • the use of personal protective equipment (PPE) and safety technology that helps keep workers safe and on the job
  • a routine workplace safety audit of the environment to identify and correct potential hazards
  • an ergonomic evaluation to prevent common and costly musculoskeletal disorders (MSDs) 
  • workforce safety training to encourage safe work practices among employees

🔲 Workforce Safety Training

Training on safety topics and common workplace hazards reduces the likelihood of workers being injured at work, especially newer workers. While safety training may seem like an extra upfront cost or a loss in productivity, it pays off in the long run with fewer workplace incidents, reduced liability for employers and improved operational efficiency. This makes it an important tool in controlling workers’ comp costs.

Insurance carriers often offer policyholders free resources, ranging from information on how to create worker training programs to various virtual and in-person worker training materials and programs. And innovative safety tech, like wearables, can provide continuous coaching on proper body mechanics that leads to lasting behavior change, as well as actionable data showing which workers would benefit most from additional safety training.

🔲 Immediate Injury Reporting Protocol 

When an injury does occur in the workplace, one of the most cost-saving measures an employer can leverage is a prompt reporting policy. The more time that passes after an injury, the more likely it is to be more expensive for employers. 

Lag time can lead to:

  • an injury getting worse and requiring higher medical costs
  • greater lost productivity due to delayed medical care
  • an increased chance of litigation and higher legal expenses 
  • fines for failure to report injuries in a timely manner
  • costly claims that have a negative impact on workers’ comp premiums

Immediate reporting is the best practice for accidents and injuries. This practice applies to employees reporting an injury as soon as possible and to employers immediately communicating an injury to their workers’ comp insurance provider.

🔲 Incident Response and Investigation Policies

Another key way to control costs around workplace injuries is to have a clear plan in place for what happens when an injury occurs. A proper response and an investigation not only ensure claims are handled as effectively as possible (incurring less medical and legal expenses), but also can help protect employees from repeated future injuries. 

The plan should cover immediate response protocols for providing proper medical care and incident investigation policies that determine how the injury happened. A thorough investigation may include:

  • photos of the injury site
  • review of security footage
  • injured worker, co-worker and witness interviews

Beyond aiding in efficient claims management and preventing future accidents, proper incident response and investigation can protect employers in the event that an employee chooses to litigate a claim, or in the rare occasion of fraud.

🔲 Claim History and Injury Trend Evaluation

Most workplace injuries, from strains and sprains to slips and falls, are entirely preventable. Employers can save money and reduce workers’ comp premiums by identifying injury patterns and taking corrective action. A regular claims review or analysis of an employer’s claims history can reveal these patterns, showing which claims are costing the company the most. Insurance providers often offer claims review services at no cost to insureds.

Furthermore, trend data collected from wearable safety tech deployed across a workforce can reveal spikes in injuries among a specific job function, or during a particular time of day or day of the week. This information can help employers focus on

Again, preventing injuries from happening is the best way to control workers’ comp costs.

🔲 Return-to-Work Program

A return-to-work program can help save money when an injury occurs. Getting an employee back on the job after an incident assists in resolving a claim quickly, which is important as open claims costs are passed directly to the employer.

A return-to-work program includes transitional duty assignments and scheduling modifications to help employees ease back into work as appropriate. This can help:

  • decrease medical costs
  • reduce the likelihood of litigation and legal expenses
  • lower costs of temporary or replacement workers
  • reduce workers’ comp insurance costs

Insurers often assist policyholders in determining when a return-to-work program is appropriate as well as in implementing the program. These programs boost both productivity and morale while helping to manage workers’ comp expenses.

🔲 Dividend Plans

Another notable way to save on workers’ comp costs is for policyholders to select a policy with the potential to earn money back dividends. Workers’ comp policies that offer a dividend plan reward policyholders for keeping their workers safe. When the policy expires, the insurer evaluates the policy’s loss ratio. If it’s below an established threshold for the policy period, the employer can recover a sizable portion of their premium. Basically, the fewer claims a company has incurred, the greater the money-back dividend it can earn.

By implementing safety standards, like workplace safety programs, wearable safety tech, and safety training, insureds reduce claims, improve loss ratios and maximize potential dividend payout.

Kinetic Insurance policies include the Kinetic Reflex wearable safety platform, proven to reduce workplace injuries and lost work days, at no charge. In partnership with Nationwide, we offer free resources and services to help policyholders maintain a safe and productive workforce and save money. 

Learn more about cost-controlling support services available to Kinetic policyholders. Reach out at info@kinetic-insurance.com.