For many employers, California workers compensation insurance is simply an unavoidable cost of doing business, unworthy of much attention. At least until their premiums go through the roof.
The fact is, workers’ compensation insurance isn’t merely a line item expense. It’s an expense employers have a great deal of control over. But those who don’t give it the proper attention inevitably make mistakes that can drive up their workers’ compensation costs.
Don’t make these 7 potentially costly mistakes with your workers’ compensation insurance program:
- Hiring the wrong workers. Hiring qualified, experienced employees can dramatically cut down on workplace injuries and workers’ compensation claims because more experienced workers understand how to properly perform their jobs and follow safety procedures. Screen all applicants carefully with background checks and in-depth interviews.
- Misjudging your payroll. Employers often underestimate or overestimate payroll, and both can cost you. Your premium is directly related to your estimated payroll, so any underestimation will result in an additional premium due at audit time, and that can be a costly surprise. On the other hand, overestimating the policy period payroll results in overpaying for coverage, and that means your overpaid premium funds are in the hands of the insurance company until the audit is completed, instead of being invested or otherwise working for you.
- Not having a return-to-work strategy. The number one driver of workers’ comp claim costs is severity, the length of time an injured employee is off work. Getting injured workers back on the job as soon as feasible is crucial to keeping claim costs down. Offering light and modified duty options has proven to speed up recovery time, maintain productivity, boost injured workers’ morale, and keep injured workers from spiraling into the abyss of disability.
- Mismanaging claims. There are seemingly endless ways a claim can go south. Make sure you’re not missing crucial filing deadlines, submitting incomplete paperwork, failing to work closely with the claims adjuster, or making other claim handling mistakes that can end up driving up claim costs and your premiums.
- Failing to communicate. Too many employers simply forget about the injured worker once the claim has been filed. But someone is going to communicate with that injured worker, including friends, other injured workers, and maybe an attorney. And don’t forget the injured worker will be bombarded with messages on TV, radio, billboards, and the Internet. Make sure you keep the lines of communication open while the injured worker is recovering.
- Failing to monitor medical care. Medical care is one of the biggest cost drivers in any claim. Don’t take a hands-off approach to your injured workers’ medical care. Make sure you’re staying in the loop with the employee’s care providers and the adjuster to ensure the injured worker is getting appropriate care.
- Treating workers compensation insurance as a commodity. If you make your decision on workers’ comp insurance based solely on price, you may be exposing your business to unknown liabilities. There are reasons for rate differences between carriers. Will the cheapest policy provide you with the service your business needs? Does the least expensive carrier know your industry, have your best interests in mind, or have longevity in the marketplace? Choose your carrier and your coverage wisely.
Ready to take control of your California workers compensation insurance costs and get the most for your money? Contact to the California workers’ compensation professionals at Republic Capital Claims Administrators today.