How To Contain Workers’ Compensation Costs

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How To Contain Workers’ Compensation Costs

As a business owner, you go to great lengths to provide a safe working environment for your employees, but when dealing with humans, expect the unexpected.  Despite your best efforts and vigilance, accidents will happen. The Bureau of Labor Statistics notes that in 2017, there were more than 1.1 million workplace injuries. Make sure you have adequate workers’ compensation to protect your business from loss.  Workers’ Compensation Insurance should be an important part of your risk management program. There are proven methods to help you contain your costs as much as possible.

Here are some proven tools to help you contain your workers’ compensation costs:

  • Create a company safety policy and clearly define safety rules
  • Make sure upper management provide support
  • Designate a safety committee or coordinator
  • Create safety checklists and hazard reports for each job function
  • Investigate all accidents
  • Have a clear safety enforcement policy
  • Provide safety training to all employees
  • Request regular claim review meetings with your carrier and agent
  • Develop a return to work program

Do not delegate safety, the companies with the best records have an owner on their safety team. If you are paying at least $5,000 per year for workers’ compensation, it may be worth your time to setup a formal cost containment program with the state.   Contact Steve Longenecker for more details.

Every Colorado business with even just one employee on a W2 is required to provide Workers Compensation Insurance. The cost of this insurance policy cannot be taken out of wages but is entirely a business expense. Premiums are calculated based on total payroll for the number of employees in each type of occupation category, as defined under Colorado state law. Each type of occupation is assigned a code based on the hazards involved and the rates are proportionate to this code.

 

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