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Tips to businesses on saving money on workers' compensation, such as office safety programs, tax credits, return to work programs and class modifications.
BIO:
Loraine Lacey is an insurance producer with Freeman & Pearce Insurance Agency and the President of the Independent Agents and Brokers of Orange County.
TRANSCRIPT:
Hi, I'm Loraine Lacey. I'm a commercial insurance broker with Freeman & Pearce Insurance Agency, and I'm also currently President of the Independent Agents and Brokers in our territory.
Today, we're going to talk about the very important topic, "How do you save money on Workers' Comp?" First, we're going to talk about how you develop a premium on the basic Workers' Comp policy.
Every job in the state has a classification. That classification also has a premium rate attached to it. That's called the Basic Policy. However, there are ways that you can save money on that Basic Policy.
So, Saving Tip Number One: You are probably eligible for one or two very sizable credits on your Workers' Comp Basic Policy. The biggest credit that you'll be able to get on a Workers' Comp Basic Policy has to do with Experience Modification, or otherwise known as Ex Mod in the insurance language. This Ex Modification has to do with any claims you might have had on your policy as compared to other people in the same form of business that you have. If you have had a good Claims Report, then you would have, possibly, a Credit Ex Mod. If you have had a lot of claims, you probably have a Debit Ex Mod.
Saving Tip Number Two: Safety programs have a lot to do with whether you're going to have a good Experience Modification or a bad Experience Modification. We're going to show you in a few steps what processes you can take, because at this point in time, you may think, "Well, I'm doing really good things at my business, and I've got a safe environment, but I still want to save money on Workers' Comp." So, I'm going to show you a step-by-step plan that you can put into operation.
Step Number One: Get a safety committee in your office.
Step Two: Have safety meetings on a regular basis. OSHA requires every quarter if you have 10 or more employees, but we recommend that you meet at least once a month, because you have a lot of things to consider. For example, teaching the employees how to lift properly, how to carry things properly, how to use the forklift. There's so many subjects that need to be discussed.
Number three is a really important one and that is to put together a First Aid Program in your office. Did you know that you as an employer can legally pay the bill, if the injured employee goes to the doctor or the clinic, you can pay the bill and not have it turned in as a claim? However, it has to be a legitimate first aid claim.
Step Number Four: Develop a Return to Work Program. This is a very important way to keep your costs down on a claim. For example, if you have an employee that has been injured, but he could come back to modified duty, if you develop a program where he could come back, you're going to find that he heals much faster, and it would also in many, many cases has saved expensive litigation.
Step Number Five: Get those old claims closed! I cannot tell you how important that is to your Experience Modification. Many insurance companies let an insurance claim stay open two, three years, and there's not even any activity on it, but it's up to you, the employer, to call the insurance company's Claims Division, ask what's going on with that claim, and stay on them, even if it's once a week, to get that claim closed.
Now I'd like to show you Saving Tip Number Three: Monitor your employees' class modifications on a regular, on-going basis. You would be surprised how many times employers are paying way too much insurance, because they haven't changed classifications, and they are more expensive classifications than what the employee is actually doing.
Saving Tip Number Four: Review every single Annual Workers' Comp Audit. You cannot believe the mistakes that are found. It has been noted that at least 80% of all audits are wrong and have many mistakes on them, and in most cases, those mistakes cost the insured an additional audit premium.
Smaller companies may not qualify for the Experience Modification, but if you follow the steps outlined here to set-up a safety program, you will be deserving of that extra special credit -- claims free credit -- on that basic policy.
Owners of companies, managers: be proactive in getting this program put together. You need to be involved. If you're involved, your employees will follow suit. You will have a safe environment if you follow these steps.
I'm Loraine Lacey. I'm happy to see that you are watching this video and that you're going to save money on your Workers' Comp.
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