How to Protect Your Business from Workers’ Compensation Claims

According to the Occupational Safety and Health Administration (OSHA), employers pay about $1 billion per week in workers’ compensation claims costs. New injuries occur roughly every seven seconds, bringing the average annual count to 4,500,000, per the National Safety Council.

Indeed, workplace injury is all too common, and it’s costly as well. OSHA provides a calculator business owners can use to tabulate the estimated direct cost of any given injury, with amounts ranging from an average of $13,364 for a contagious disease claim all the way through $149,103 for something severe like asphyxiation. This, of course, doesn’t include indirect costs, such as lost productivity, preventative training measures, and repairs to damaged business personal property. Depending on the size of your business, even a minor claim could wipe away profit for the year or result in your business shutting down.

Here are some suggestions to help protect your business from workers’ compensation claims.

Know Your Risk

Although all businesses are at risk, a few industries have more workers’ compensation claims than others. You’ll want to be especially mindful if your industry is:

  • Service-Related
  • Transportation / Shipping
  • Manufacturing / Production
  • Installation, Maintenance, and Repair
  • Construction

Conversely, there are a number of industries with very little workers compensation exposure which in turn results in fewer claims.

  • Banking and Finance
  • Software and IT
  • Professional Services
  • Broadcasting
  • Medical, Nursing, Health Services

Even though there are fewer claims in these industries, a claim can still be a heavy financial burden should an incident arise. A cost benefit analysis can show just how much you can gain by having coverage in place.

Be Familiar with the Most Common Workers’ Compensation Claims

The National Safety Council gathered data on the most common injuries. In knowing these, your business can establish policies to minimize the risk to employees.

Most Common Injury Types

  • Sprains, Strains, or Tears
  • Soreness or Pain
  • Cuts, Lacerations, or Punctures

Most Common Events Leading to Injury

  • Overexertion (34% of injuries)
  • Contact with Objects and Equipment (25% of injuries)
  • Slips, Trips, and Falls (25% of injuries)

By understanding what areas of your operations provide the most exposure to workplace injury, you can then tailor your operations in a way to minimize the event of an occurrence, the severity of an occurrence when it happens, or both.

Enact Policies to Reduce Risk

Let’s face it, things happen. If a company could find a way to reduce 100% of the risk for workplace injury, they would not only revolutionize business in general but they would be sitting on top of a goldmine. But until that day, the best business owners can do if enact policies to reduce of the risk as low as possible.

Breaks: Although rest periods are traditionally mandated by law, it’s important to adhere to them and offer extra recovery time for those in physically-demanding jobs.

Lifting: Create policies that require employees to use braces when lifting and set maximum lift amounts. Provide employees with training on how to safely lift objects and offer refresher courses. Also, refer to your workers compensation policy as carriers will typically have guidelines for maximum weight suggested.

Protection: Make sure employees have access to the right protective gear for their environment and do not allow anyone to work without it.

Housekeeping: Do a walk through your place of business and look for things that could result in slips, falls, or trips. Issues like uneven walkways should be corrected or marked, while spills should be marked and tended to promptly. Because each person will have slightly different abilities in terms of things such as balance and vision, it’s especially helpful to have several people do walkthroughs.

Shifts: People on the night shift have 30% more incidents than their daytime counterparts. Whenever possible, reduce or eliminate nighttime work. For those companies that have long operating hours, have a rotating schedule, or cover irregular shifts also have increased risk. If you cannot put your team on a standard daily schedule, be especially mindful about giving them a reliable schedule that enables their internal clocks to adapt and keep to the schedule as much as possible. Be advised that missing as little as two hours of sleep results in about the same impairment level a person would have after drinking three beers. Overwork and sleep deprivation has been found to be responsible for an estimated 274,000 workplace accidents per year. If you aren’t honoring their sleep schedule, it’s likely you’re increasing your risk for a workers compensation claim.

Phones: The leading cause of workplace death is car accidents, and 94% of all crashes are caused by human choices. While sleep is a major component of this, cell phone use is a huge concern as well. Your company should have a phone policy as well as policies which relate to other forms of distracted driving.

Here are a few other suggestions of ways your business can reduce workplace injury.

Have Adequate Insurance

Though having insurance in place does not itself protect your company from claims, it still makes good financial sense. In the event of an illness or injury, it provides benefits to employees for work-related injuries or illnesses including medical care, wages from lost work time, and more so you don’t have to come out of pocket. It will even help expedite your employee returning to their position.

If you can identify which injuries have the potential to occur within the normal scope of work for your employees, you can then use the OSHA calculator to help determine how much coverage you’ll need to provide adequate protection to your business. Depending on your state, limits may start at $100,000 per occurrence for bodily injury, $100,000 per employee for bodily injury by disease and a $500,000 policy limit for bodily injury by disease. Commonly though these limits can be raised to $1mil each for a marginal increase in your premium.

In addition to the fiscal benefits, having insurance is good for employee relations. Your team deserves to be taken care of if something goes wrong on the job. Your policy will add an extra measure of security so the team can feel confident and protected in their workplace.

Get Protection from Workers’ Compensation Claims

The above suggestions are to reduce risk are not all-inclusive, but they are a great starting point in helping you reduce your exposure. There is no way to totally safeguard against workplace injury, thus why it’s important you have workers’ compensation insurance if you want to protect your business and your employees. Take the first step toward a more secure future; get a free insurance quote today.

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