Insurance varies from state to state and amongst different insurance carriers; however, some states allow insurance companies to recognize a better-than-average or worse-than-average risk by applying ad hoc credits or debits to modify the premium - also known as Premium Schedule Modifications (discounts or surcharges).
First, let's make sure everybody is on the same page. Your insurance agent collects information from you - the business owner - and completes the application process. That application is then presented by your agent to an Insurance Underwriter. The underwriter determines how much a policy will cost or possibly reject it and not quote on it at all.
So as a business owner, your very first line of defense in trying to cut cost is selecting an experienced agent and taking the time to provide as much information as possible. The more information you give your agent, the better they can present your company in the best light to the underwriter.
In no particular order, these are some things that insurance underwriters (the person deciding how much your policy will cost) likes to see. It's possible to get a credit when these items are in place; on the other hand, it is possible to get a debit if they are not. Typically, this information is presented when "shopping" for new insurance or a new agent. Check out our podcasts for a deep dive on these suggestions:
A Claim's Coordinator position established within the policyholder's organization and that the Claim's Coordinator stays in touch with the insured worker and claims adjuster throughout the recovery process of the injured worker.
All accidents are investigated and that there is a documented and reviewed root-cause analysis of all accidents that is communicated to all employees in order to mitigate the potential for another claim occurring.
An emergency plan has been developed for fire, storms and emergency evacuation; all staff have been trained; and maps have been posted in major ingress and egress points of all facilities. Also all fire extinguishers are up to code.
All employees have access to information about workers' compensation on the business premises and that the employer properly communicates to all employees what to do in the event of an injury. Who to contact, alternate person, after hours, all postings visible, etc.
Detailed post accident process, including the proper implementation of the Panel of Physicians and an Agreement Between Employer/Employee Choice of Physician form.
Any hazards are well-marked and an Inspection Program has been implemented to monitor such hazards, taking corrective actions where necessary and communicating findings to all staff.
Should an emergency service (911, ambulance, fire, police, etc.) be needed, everybody knows that any one can call 911 and not wait for a supervisor. Also every one needs to know how to communicate your location by address and entrance locations, and also who is in charge as point of contact.
An active Safety Committee is established. Safety programs are implemented and each program should have documentation to prove which employees attended, along with date and program materials used.
Early Return to Work Program or Transitional Duty program is in place.
Proven history or process of prompt claims reporting.
For businesses using company vehicles, there is a process in place at pre-hire and random checkpoints that drivers have a clean license with no speeding tickets, or violations.
Commitment to working with an insurance carrier's Loss Control Staff.
Quality safety equipment or applications are utilized to keep workers safe, such as the age, model and proper upkeep of equipment. Also, all manuals for each piece of equipment are kept.
Drug Free Workplace program but understand the pro's and con's before implementing the program.
Understanding proper OSHA reporting.
If you desire ways to make your insurance premiums cheaper then this is the way to start that process. Your insurance agent is a great resource. Manuals, reports, job analysis, etc., all of these things can be given to your agent in order to showcase your business to the underwriter. Remember, not only do you need to show you have these policies and procedures in place, but you also implement these on an ongoing basis. You also need to show there is a disciplinary program with enforcement for those who do not abide by these policies.
When an insurance underwriter completes their evaluation, often they will search the OSHA database to see if the policyholder or prospective policyholder has been inspected for safety violations. These searches are easy to complete and often reveal valuable information that can assist an underwriter in offering an insurance policy to the business. An underwriter may decline what appeared to be a perfect risk for an insurance company once they review the OSHA violations in the database. Safety is very important.
It is worthwhile for an employer to pay attention to what can be done to become a better-than-average risk for insurance companies. Do as many of these suggestions as possible, and HAVE EVERYTHING IN WRITING. It is your agent's job to showcase the best attributes your business has to offer, but if you want discounts on your premium, YOU have to implement these in your business. The more you can show you take safety very seriously, the better you will look to the insurance company.
Blog Written By: Chris Cain, CWCP
ABOUT CHRIS
Current
Host of Work Comp Chaos | licensed in multiple states as both an insurance adjuster & agent
Vice President of The Southern Agency Insurance in charge of Operations and Claims
United Heartland Insurance Company Claims Advisory Council
Prior
State of Tennessee Telehealth Advisory Committee assisting in developing rules and statutes
Utilization Review Advisory Committee
Past President of the Tennessee State Claims Association
Served 15 years as President of the Chattanooga Claims Association
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