How to Take Control of Your Workers' Comp Claims Frequency
With the insurance landscape ever changing and costs continuing to increase, the importance of reducing your frequency of claims is critical. New rating strategies place a significant emphasis on frequency when evaluating an organization’s ability to control and mitigate risk. Carriers are hesitant to even consider underwriting companies that have frequency problems. Organizations must find new strategies to reduce exposures and workers’ compensation costs.
To demonstrate the role of frequency in determining your experience modification, consider the example below:
- Two companies have a $50,000 dollar claim history over the past year. Company A has had five similar accidents worth $10,000 dollars each in claims, while Company B has had one freak accident worth $50,000. Which company do you think is in a worse position?
Frequency plays a significant role in the rating of your experience modification. In this example, Company A would pay a substantial amount more than Company B due to the likelihood that additional similar claims will follow. This negatively impacts their experience modification for three years, which directly ties to non-renewal or significant increases in insurance costs. Would you consider your organization more like company A or company B?
There are three key strategies that have helped our clients reduce frequency of claims:
- Develop a proactive safety program that’s embedded in your culture
- Implement employee training that is pertinent to their specific job
- Increase employee engagement
Establishing a proactive safety culture is the catalyst for Company A to take control of their frequency problem. But, how do you establish a proactive safety culture? The key word is proactive. Begin every meeting with a focus on safety, even if you spend just a few minutes discussing this. The focus on safety will result in a “safety first” culture, which is an important step in reducing your claims frequency issues.
When you first hire new employees, ensure they are aware that safety is their obligation and integral to the company’s culture. Highlighting safety as a core value on day one is critical. Reinforce this by routinely enforcing safety policies and procedures.
Training is also critical -- the more time spent here, the less chances of having frequency issues in your workplace. Clearly document the specific responsibilities and techniques for doing each job. Remember, your employees don’t know what they don’t know! Proper lifting techniques should be taught as well as ways to operate machinery, and proper safety attire should be worn at all times. Letting the little things slide (like seeing an employee without safety glasses) won’t be helpful in the long run. Remember, proactive is the key word. Fix the problem completely and correctly the first time and a safe environment (all the time) is within your reach.
Finally, to ensure this program resonates with your employees, get them involved! Creating a collaborative team atmosphere is a good way to get everyone to buy into the program. This is critical to your success. Include employees from every department on your safety team. Front line employees will most often find proactive solutions to prevent future losses from ever happening. These key employees should be trained to diagnose potential future exposures.
Effectively reducing your total cost of risk associated with workers’ compensation exposures is the primary purpose for this safety program. Take these simple steps and incorporate them into your daily routine. If you are serious about safety, safe to say, you will be seriously saving money!
Our Workers’ Compensation team looks forward to helping you maintain your workers’ compensation program, developing or implementing a proactive safety program or evaluating your current program. Please contact Patrick Darcey, CIC at 401-671-6355 or firstname.lastname@example.org to further discuss this.