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When your clients are looking to control workers’ compensation costs, they typically focus on more effectively managing claims, starting at the time of loss and continuing through the life cycle of the claim. While this post-loss approach is indeed an important aspect of an organization’s workers’ compensation cost control and risk management program, it is not necessarily the best area to focus on to reduce costs. Focusing on the post-loss approach does not address all of the most important elements in workers’ compensation cost control. In order to better control workers’ compensation costs, your clients need to take a more proactive approach with loss control; preventing losses before they can occur and thus reducing the total amount of workers’ compensation claims made.
The key to effective workers compensation loss control is to make the entire workplace safer through the implementation and consistent management of safety and injury prevention programs. These types of programs have not always been viewed in a positive light by organizations. Rather than looking at safety and injury prevention as a cost reduction strategy, many feel it is more of a hoop to jump through to maintain regulatory compliance with state and federal agencies like the Occupational Safety and Health Administration (OSHA). Despite this belief, research shows that when an organization invests in safety, they often greatly increase their return.
If your client is ready to reduce their workers’ compensation claims, share with them these four steps to create a successful loss control program:
An assessment of workplace hazards and risks should be conducted by either an external loss control professional or members of an internal safety committee. OSHA recommends that two managers and two responsible and reliable employees should make up an organization’s safety committee. The object of the assessment is to look for any hazards that could pose a threat to workplace safety as well as note any common injuries in past workers’ comp claims. Knowing what the risks are helps create a foundation for the next step of the program.
2. Creating an Action Plan
Using the information from assessment, the safety committee or loss control professional can then identify each independent risk and provide suggestions for solutions to reduce or eliminate each risk in a customized loss control action plan.
3. Implementation and Training
Implementation of the action plan will typically include some type of training to educate all employees on properly observing the loss control program guidelines.
4. Documentation and Record Keeping
Accurate and detailed records should be kept to create accountability as well as to enable the organization prevent repeated incidents in the future. Documentation and record keeping is also required to maintain compliance with OSHA and other regulatory agencies.
An effective workers’ compensation loss control program makes the workplace safer for employees so that less claims occur in general. This, of course, results in lower workers’ comp and commercial lines insurance premiums for your insured and can also impact the organization in other unexpected ways, such as improving productivity, decreasing turnover, reducing overtime costs and more.
About Mavon Insurance
At Mavon Insurance, we pride ourselves on our unique approach to insurance. We focus on integrity, communication, professionalism, respect and gratitude to help our clients succeed and place business in specialized markets. For more information about our products or to become an agent, please contact us today at (855) 248-1480.