According to the National Council on Compensation Insurance, the frequency of workers compensation lost-time claims saw a 2 percent decline in accident year 2013 when compared to 2012. However, these claims still create a financial burden for employers. In fact, according to the National Academy of Social Insurance, workers comp insurance paid out $60.2 billion in total benefits in 2011—and total costs to employers reached $77.1 billion. While workers compensation insurance laws vary by state, most require business owners with employees to purchase coverage. Fortunately, there are actions you can take to reduce the chances that your own workers will file costly claims.
1. Start by making safety a priority.
If you have not yet done so, develop a comprehensive written safety program. When you improve the safety of your workplace, fewer accidents will occur. This means there will be fewer claims increasing your workers compensation insurance rate.
Your program should include regularly scheduled safety meetings, periodic retraining plans and a clear description of the disciplinary actions you will take if employees violate the workplace safety rules. It’s essential that your managers and supervisors commit to enforcing the program and reinforcing its importance with your employees.
2. Take immediate action.
If one of your employees sustains an injury on the job, complete an accident report as soon as possible. Include as much detail as you can, including photographs of the scene and witness accounts. Send this report to your workers comp insurance agency within 24 business hours.
Consider asking the employee to submit to a drug test as well. While a positive test may not result in claim denial in most states, it can help your case. Random drug testing of all employees is another option. If you clearly communicate this as a requirement for employment, it should result in fewer potentially drug-related accidents and claims.
3. Look out for fraud.
If you suspect an employee has filed a fraudulent workers compensation claim, notify your insurance company as soon as possible. While these do not always indicate fraud is occurring, potential warning signs include:
- Alleged accidents taking place on Monday mornings
- Monday reporting of alleged accidents that occurred Friday afternoon
- Discrepancies between the employee’s description of the accident and the medical report for the injury
- Refusal to submit to diagnostic procedures to confirm the extent of the injury
- Alleged accidents that occur immediately before or after job terminations, layoffs or strikes
- Alleged accidents that occur without witnesses present
- An employee who has made previous workers compensation claims
4. Add accident or disability insurance to your voluntary benefits.
According to the Aflac Workers Compensation Report, employers who provided their workers with access to accident or disability insurance experience declines in workers compensation claims. Among large companies, 55 percent reported a decline, followed by a 34 percent decline in claims at small- and mid-sized companies.
Whether you’d like more information about reducing workers compensation claims, want to review your insurance policy, or need assistance creating a workplace safety program, contact your insurance agent or workplace safety advisor today.