As a small business owner into today’s economy you’re facing a lot of uncertainty. Regrettably, one of the few things you can be fairly sure about is that your operating costs will continue to increase. For example, Worker’s compensation insurance premiums, already a significant cost of doing business, are skyrocketing. According to the Insurance Information Institute, premiums for workers compensation insurance have gone up 50% nationwide over the past few years. You can fight back and help keep your worker comp costs under control by making on-the-job safety and training a top priority.
Your worker comp premiums are calculated using a number of factors. These include your claim history compared to other companies in your same industry. While the total number of claims has actually gone down over the past few years, the length of time workers are off has increased. The latter actually offsets any benefits derived from the former, because the longer a worker is on disability, the higher the total loss to you. When a worker is on the payroll but not working because of an accident, you’re not just paying for more medical services required by a lengthier injury, you’re also absorbing the cost of lost productivity and expenses involved in hiring and training a replacement. Some experts say these soft costs can add up to as much as four times the direct worker compensation insurance costs. That doesn’t begin to take into account the cost of law suits which can run into the hundreds of thousands of dollars. That kind of unanticipated cost can quickly put your small business out of business.
While there are certified safety professionals you can hire to help you craft a solid program, there are a number of free and relatively inexpensive steps you can take to reduce your exposure to risk right now. A good source for free advice is OSHA, the Occupational Safety and Health Administration. This federal agency has an array of free health and safety programs designed specifically for a small business. You can also take advantage of OSHA’s free consultation services.
- One of the first things you should do is put your worker safety programs in writing. Proper documentation includes job descriptions, the correct way to use machinery and equipment and the safety procedures employees should take when a work-related accident happens.
- Implement training programs to orient new employees in on-the-job safety, then schedule regular training updates for all staff. Keep records and require employees to sign-off after receiving the training.
- Provide supplemental safety materials such as brochures, videos and newsletters from industry, state and federal safety organizations.
- Form an employee safety committee and put them in charge of evaluating existing programs and suggesting improvements.