Managing Workers’ Compensation Costs – More than Just a Safety Program

While business owners have a responsibility to maintain safe working environments, there must be another assurance in place when an accident does occur. All businesses, large and small, benefit from securing workers’ compensation that simultaneously works to protect the employees on the team and the business finances. Although this is necessary and valuable coverage, business owners should be proactive in handling their coverage and premium prices. Take a look at just a few key strategies to help effectively control your workers’ compensation insurance costs.

What More Management Can Do to Control Workers’ Compensation Premiums Outside of a Safety Program

  1. Improve culture

If you cultivate a culture of safety from the start, your team is more likely to adhere to high safety standards. In order to implement this, it requires frequent safety training and dedication to improving positive leadership. Employee morale plays a significant role in productivity, engagement, and their willingness to follow safety guidelines and report problems when they arise.

To develop a safety culture that engages all employees, select someone or a team of people who are fully invested in the cause, and will hold others accountable. This safety committee should represent different departments of the company, and share key safety information with the rest of the organization. When the staff routinely hears from the safety team, it sends a message that safety is a priority and important to the company.

  1. Consider employee wellness

Increasing employee wellness involves ensuring your team is happy and healthy. An effective employee wellness program must consider the physical, mental, and emotional wellbeing of the team.

If stress is a large factor in your industry, take steps to specifically alleviate it. You may be able to offer stress management courses or interactive activities such as yoga or meditation. If employees sit down driving all day, you may be able to offer exercise classes and weight management programs to keep them active and feeling their best. Many wellness apps also increase awareness and allow coaching, support, and accountability to help your team reach their goals and feel more satisfied in life.

Understand the key risk factors in your organization so that you can proactively prevent health issues from arising.

  1. Hire right

While accidents happen, it is best to ensure that your business is hiring the right candidate from the beginning. Choose new hires who share the same safety culture values. Best-in-class companies have well-established employment practices, pre-hire screenings, and safety training.

It’s also essential to develop a detailed, solid written job description as part of the hiring process. This should specify all job functions, including frequency of tasks, lifting and handling requirements, and machinery that the team member will use. Also, conduct a drug test and obtain a motor vehicle report for new hires. This helps your business narrow down safe candidates.

  1. Report immediately

The sooner you can file a claim after an accident, the better. The longer you wait to file a claim, the more you are putting your business and employees at risk. If an employee has been injured, it’s essential to gather as much information about the incident as possible, start a claim immediately, and seek medical assistance for the injured employee. Employees should understand what should happen if they are injured, where they go for medical care, and what the return to work process looks like. Transparency is important.

  1. Consider Mods
The organizational factors and practices above are some of the key drivers that impact your modification factor. Mods, or experience modifiers, can have a significant impact on the bottom line as it is a key component of the workers’ compensation premium calculation. Mod is a measurement of your company’s individual claim performance against similar companies in your industry. In a chain of events, your audited payroll and loss data are considered when determining your mod. In order to control your workers’ compensation insurance costs, you can impact your mods by reducing the number of claims filed. It is also worth double-checking that such data is correct and free from errors. Review payroll, class codes, and claim codes for inaccuracies.

Working with an effective safety program, these safety practices can help to control your workers’ compensation costs, from reducing the frequency of claims to cultivating a safe culture and environment. Find out how PMC Insurance can provide affordable workers’ compensation for your industry. Contact us today at 781-449-7744 or

By PMC Insurance Group

Since 1996, PMC Insurance Group has worked to help independent agents grow their client base by offering workers' compensation solutions for a wide array of businesses. As one of the most distinguished workers' compensation wholesalers in the country, we have the tools and resources to help you create coverage programs for both small businesses and large accounts.