Small business owners across the US today have a tornado of expenses that seem to pile up and expand at an ever increasing rate. One of those is expenses that seem to be the most uncontrollable at times is the commercial insurance package and workers compensation.
Often times I hear “but Aaron, its work comp all the same? Don’t I pay a flat rate per $100 of payroll and I am protected against an employee injury?”
Yes and Yes. If you are a responsible employer and you have adequate coverage on your employees, you will have insurance for employee medical expenses for work related injury, employee lost wages due to work related injury, and protection against your liability as the employer for any negligence that could have contributed to the injury (up to a set limit as described in part B of your work comp policy).
I can hear you thinking: “if that’s your answer, then how can I save money on my work comp?”
Let’s dig in. Here are the big 5
- Safety and the Experience Modification Factor
- Claim Management
- Modified Duty Return to Work
- Self-Insurance & Deductibles
- Drug Free Workplace Credits
I recently watched an awesome video about the metrics you can use to track work comp success rates. Since I focus on business that pay under $2M in total work comp premium, I will leave out some metrics. The metrics I recommend are:
- Sales (Gross Revenue) to pay for a claim
- Cost Per Full Time Employee
- Lag Time
- Return to Work Ratio
- Number of employees out of work right now
In future articles I will dig into each area of savings and each metric. Be sure to check back soon for more info.