In this age of everyone suing everyone, it is essential that companies find ways to protect themselves against workers’ compensation claims. One sector that is at a high risk for claims is the manufacturing industry. The risks come with the small to mid-market companies that cannot find the partners they need to help them target their dangers and find techniques they can use to reduce the costs of the losses for which they are at the greatest risk. These four tips can help manufacturing companies reduce the cost of these claims now and in the future.
1. Evaluate History of Past Claims
To manage your claims in the future, you have to understand what has happened in the past. This means that you have to look at workers’ compensation claims and take corrective action to reduce loss. This evaluation should include:
- Analyzing the trends of claims that are affecting your company via loss experience and cost.
- Developing a corrective plan based on your evaluation.
- Detailing the financial gains that can be achieved by implementing the corrective plan.
This process of evaluation can reduce insurance premiums by as much as 15% within the first year, which is a substantial cost savings.
2. Reduce Time to Close Claims
One of the easiest ways to reduce the cost of claims is to close claims quickly. To do this, your company needs to conduct claims reviews personally, on a regular timetable, with your insurance claim adjusters, to decide whether:
- Open claims need to be closed due to the circumstances of the claims
- Claim reserves that are at a high level should be adjusted downward
These two decisions have been shown to be very effective in reducing the number of open claims, and this lowers the cost of premiums, simply due to the reduced time spent on claims. By having quarterly claims review with your insurance adjuster you can reduce claims by as much as 20%.
3. Control Workers’ Compensation Premiums
Analyzing the workers’ compensation experience modification ratings (EMR) can allow you to regain some control over the premiums. Even though they are very complex, you need to routinely evaluate the modifier to determine if it is still accurate and to see how it is going to impact future premiums. This is a big part of keeping premiums at a stable level.
4. New Hire Screening
One of the best ways to prevent workers’ compensation claims is to evaluate the hiring process. Employment screening can ensure that a candidate’s physical ability is considered, based on their detailed job description, to ensure that they can do the job you are considering for them. New workers are more apt to be injured and file a worker’s compensation claim than experienced ones. Pre-hiring screening can help to decrease the likelihood of someone being injured on the job and, thus, decrease loss.
Smart risk management strategies that flow from evaluating the past, to screening new hires, to controlling premiums, to reducing the amount of time to close claims all work together to help decrease the loss costs. These workers’ compensation tips are a start to help you on your journey to decrease the effect of workers’ compensation claims and help you to become more profitable in your industry.
Form more information about reducing your workers compensation claims and costs contact a Skyline Risk Management, Inc. professional at (718) 267-6600 to voice your concerns.