How To Reduce Worker’s Compensation Claims: Strategies and Solutions

In this guide, you will understand how workers’ compensation works, as well as the strategies and security solutions you can implement to start reducing your workers’ compensation claims and associated costs today while enhancing overall business safety.

What is Workers Compensation?

Workers’ compensation is an insurance policy that provides cash benefits or medical care for employees who are injured or become ill as a result of their jobs.

How Does Workers Compensation Work?

Your employer will be responsible for providing workers’ compensation insurance and covering costs like medical expenses and lost wages due to work-related injuries or illness. Most of the time, the costs of the insurance are paid entirely by the employer.

How Much Do Workers Comp Costs?

The costs of workers’ compensation insurance can be divided into two main categories: direct costs, and indirect costs.

Direct Costs

Some of the direct costs associated with workers comp include:

Insurance Premiums
Medical Services
Legal Services

However, the costs of your insurance premium take into account your company’s location, industry, and total payroll, to calculate your annual payments. The higher the risk associated with your operations, the higher your risk premiums will be.

Indirect Costs

Indirect costs are all those expenses associated with worksite accidents. These include:

Accident Investigation
Implementation of Corrective Measures
Lost Productivity
Repairs
And more.

Strategies for Reducing Worker's Comp Claims & Costs

Creating a strong security culture and developing a proactive approach towards security is the best way of reducing workers’ comp claims within every organization. If your company can create a good history of reducing risk and employing effective work-safety practices, cost premiums will be reduced.However, if your company experiences a large volume of claims, or you have serious safety issues within your organization, the costs associated with workers’ compensation claims will skyrocket.Some steps that you can follow today to reduce workers compensation costs include:

Picking The Right Insurance Policy
Training your Employees on a Regular Basis
Developing Wellness Programs
Creating Return to Work Policies

Picking The Right Insurance Policy

Choosing the wrong insurance policy could significantly increase the costs associated with workers comp. Industries like construction, healthcare, logistics, and agriculture typically pay higher premiums due to the higher risk associated with those industries.Ensuring that your business is in the correct category is crucial to reducing the cost related to workers’ compensation.To reduce these costs, ask your insurance agent if your organization is in the correct category.

Safety Training For Your Employees

As mentioned earlier, the best way of reducing workers’ compensation costs is to ensure no hazards happen in the first place. Investing in workplace safety programs and conducting regular employee training sessions will significantly reduce accidents in the workplace while fostering a safety culture within your organization.Not only will you create a safer environment for staff and visitors, but conducting regular employee training regularly also boosts ROI.According to the Ponemon Institute, even the least effective training programs have seven-fold ROI, while the average performing program provides a 37%-fold return on investment.

Developing Wellness Programs

Wellness programs are a great way to ensure employees feel loved and appreciated while also contributing to the awareness and adherence to workplace safety culture.According to the US Chamber, 60% of respondents reported that workplace wellness programs reduced their organization’s healthcare costs.

Creating Return to Work Policies

RTW (Return to Work) policies can significantly reduce workers’ compensation costs by allowing hurt employees to:

Recover from injuries faster
Reduce lost wages by accommodating injured employees to lighter duties that support their recovery process.
Lower your medical costs by preventing further injuries and improving recovery times.
Reduce claim costs by addressing injuries promptly and providing the appropriate support for employees to recover from their injuries.

Reducing Worker's Compensation Claims with Security Solutions

Implementing industrial-grade business security solutions is a good way to monitor safety compliance, prevent and defend against false claims, and reduce worker’s compensation risk and liability.Security solutions that will reduce workers comp loss exposure and premiums are:

Access Control Solutions
Video Surveillance Solutions
Panic Alarms
Sensors

Access Control Solutions

Besides strengthening your overall security posture, access control solutions can help you reduce workers’ compensation costs by preventing access to restricted areas, preventing workplace violence, and improving incident response times.

Video Surveillance

Video surveillance solutions are an incredible way to get a unique insight into work-related incidents and procedures. Some of the ways in which video surveillance can help are:

Providing video evidence for incident reconstruction.
Deter and expose false claims.
Help you identify potential hazards in the workplace through video evidence.
Monitoring employee behavior.
Facilitating incident investigations and corrective measures.

In addition, reviewing security camera footage will help you take preventative actions to eliminate, control, and reduce safety violations. If you have to fire someone for repeat violations, it also reduces the risk that you will lose any other type of employer liability claim for wrongful termination.

Security Alarms

Having a swift and immediate response to any threats is crucial to ensure the safety of your staff and visitors. Security alarms can increasingly help in reducing workers comp claims by:

Allowing you to quickly evacuate in an emergency
Alert the appropriate authorities
Ensure faster emergency response times

Sensors

Security sensors can be a great tool to enhance security and overall productivity within your premises. Integrating sensors with your existing security solutions can be incredibly beneficial for multiple reasons:

Proactive Safety Monitoring: Sensors can be used to monitor your employees’ activities and environment to identify potential hazards or malfunctions before any hazardous event occurs.
The food industry, for example, usually relies on environmental sensors to monitor temperature and environmental conditions in cold rooms to ensure their product remains in optimal conditions. In addition, these sensors allow business owners to enforce safety protocols and ensure employees wear gloves, masks, and hairnets in specific areas, allowing them to proactively avoid/ reduce workers’ compensation claims and fines.
Conduct Safety Improvements in Real Time: Thanks to the integration of AI and machine learning, sensors can be used to identify and mitigate behavioral patterns that could lead to an increase in accidents, slips, and falls. All of this, in real-time.
Identifying those patterns leads to increased security protocols and operations, resulting in lowered costs and increased workplace safety.
Monitoring Operations: Motion sensors are also used to monitor equipment and employee operations allowing managers to identify unsafe practices and identify and avoid any malfunction proactively.

How Security System Integration Can Help in Reducing Worker's Compensation Costs

As we discussed earlier, access control, alarms, and video surveillance can be magnificent tools. If you integrate these tools into your other systems, your benefits will multiply even further.Integrating your security solutions will significantly strengthen your security posture while streamlining the management of your security solutions. In addition, investing in security system integration will allow you to get a complete overview of your security solutions.

By leveraging all your solutions and monitoring, you will get deeper insights into who and what is causing problems. The integration of multiple security systems will reduce administrative time, improve overall security, and assist in cutting operational costs across your organization. Your integrated system can monitor employee performance, time and attendance, training and safety compliance, and operational efficiency.

How BTI Can Help

Here, at BTI Group, we have 35+ years of experience helping small to enterprise-level organizations helping companies reduce workers’ compensation claims by helping businesses implement the right IT, notification, and security systems aligned with their goals to improve safety and efficiency.

We tailor-configure solutions that your organization needs to reduce risk, ensure safety and regulatory compliance, and improve efficiency.

If you’d like to strengthen your security posture for any reason, click here to start the discussion!