The Cat Rental Store Business Tip of the Month: Curb Your Insurance Costs
The cost of insurance—especially worker's compensation insurance—keeps growing. Nationally, the cost of worker's comp coverage has jumped about 50 percent over the past few years despite a decrease in claims being filed. That's not good news for something that affects your bottom line.
The following suggestions are some things you can do to keep your insurance costs low.
- Learn all you can about insurance. Every company should have at least one "insurance expert" whether it's the owner of a small company or a CFO at a larger firm. Read each policy thoroughly and examine your coverage, deductibles and costs.
- Armed with your knowledge, seek out an agent who is familiar with your line of work. Ask your industry peers about their experience with providers and get some recommendations before you make a decision.
- Keep everyone safe and the company claim-free by talking to your employees about safety on the jobsite. Listen to their concerns, ask for their recommendations on how to improve safety and avoid accidents. Make changes based on their feedback. You may also wish to address how insurance affects the company's bottom line. Employees who understand that insurance rate hikes could hinder their chance for raises may be less likely to make outrageous claims.
- After gathering feedback from your employees, establish an employee safety program at your company. Include incentives for accident-free divisions or teams. Make safety an active part of the company culture and not just an afterthought. An aggressive safety program is a feather in your hat to the insurance company. It may take time to build up your track record, but you'll see the rewards in time and soon, you'll be in a better position to negotiate with your agent for more favorable insurance rates.
- Seek proper training for equipment operators. Equipment manufacturers like Caterpillar, rental stores and local trade associations often provide such training, so ask around. Consider enrolling the entire crew, not just the recent hires. Everyone can use a refresher course from time to time.
- Keep tabs on any claims your business does incur. Be aware that your rates can rise if you aren't able to demonstrate undertaking active measures to prevent future injuries on the jobsite. Make it a habit to follow up with injured employees and the medical professionals treating them to get that person back to work in some capacity as soon as possible.
- Involvement with "Return to Work" programs often help reduce workers comp payments. These programs are designed to help get injured employees back to work - whether to their regular position, or to "light duty" roles within 30 days after filing a claim.
- While we'd like to trust everybody, fraudulent claims can happen. Self-referred or attorney-referred claims may indicate potential fraud. Same goes for "soft tissue" injuries that can't be quantified. Similarly, studies show that many workers' compensation claims are made just as layoffs are pending or as employees hit a seniority milestone. If you think insurance fraud may be a problem at your company, consider hiring a safety consultant to conduct an "illicit injury program" to uncover such claims.
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