Worker's Compensation - Is Your Glass Half Empty or Half Full?

Worker’s compensation insurance has become an especially unpleasant subject. Across the country, premiums seem to be out of control. More disturbing, this escalation does not appear to be temporary, but instead reflective of higher costs seemingly built into the system.

Higher costs are always tough on a business. With worker’s compensation insurance, however, there is something of a silver lining. There are two key factors that make this true. First, worker’s compensation coverage, in some form or another, is not an option for a business. It is required by state law. That means everyone (and every dealer) is in the same boat. And no matter how costly it gets, no one can hop off. Second, unlike health insurance, the worker’s compensation premium for a particular business/dealership is based upon the loss experience of that dealership as compared to others in the same industry segment. For example, if your facility has relatively few injuries, it might pay a premium that is only half what an identical facility with a high injury rate would pay. That is; an $80,000 annual premium may create a lot of heartburn for the shipshape store, but it is a lot less than the $160,000 premium for an equivalent dealership with a lousy safety record.

The point; even though you may be writing bigger checks to pay your worker’s compensation premiums, if you are paying relatively less than your competitors, you have an advantage. And as premiums increase, so also increases the financial advantage that accrues from a good safety record.

But what can a dealership do to improve workplace safety? Quite a bit, actually; more than we can discuss in this article. But here are some things that can help:

• Hiring and Introductory Training: Have a current Position Description for the job at hand. It should clearly spell out the responsibilities of the position as well as the functions one will have to perform. Develop an interview process that attempts to identify those with the mental and physical abilities to do the job. You must, of course, keep in mind the need to reasonably accommodate disabilities, and will need to discuss that with legal counsel. Once an employee is hired, have a quality new employee orientation program that, among other things, includes training on applicable safety issues. KPA can help you with much of this, and you should discuss it with your KPA engineer. A well-organized and well-conducted orientation sends a powerful message to a new employee that your dealership takes its employees - and their safety - very seriously. That’s a good message to get out early.
• Injury Prevention: Establish a safety program and mean it. The elements of a quality safety program are well known, and KPA helps most clients with them. But if management doesn’t endorse and support the program, it can quickly devolve into a process of going through the motions. If your Safety Committee is supposed to meet quarterly, make sure the meeting is scheduled; and that committee members understand they are expected to attend. Post the meeting minutes so employees can read about safety activities at the facility. Be sure that scheduled safety training is attended. And; maybe the toughest part, enforce your dealership safety policies on such things as lifting heavy objects and use of safety glasses. This can sometimes involve steps that will change the culture of the dealership. Change is always difficult - and frustrating - but, heck, that’s what we get paid for.
• Injury Management: Most facilities are good about reporting accidents, but many fail to actively manage an injury. Lord knows carriers and brokers talk big story about all they will do to manage an injury. All too often, though, if an employer really wants an injury to be actively managed, it better plan on jumping in. One important thing that the dealership alone can do is be a concerned and empathetic employer. This should be an easy one. Dealerships are typically small businesses where managers know their people and are pained when one is injured. All too often, though, an injured employee is left to the tender mercies of the claims manager and medical provider, with the dealership simply waiting patiently for his rehabilitation and return. Instead, the dealership’s natural concern should translate into ongoing contact with the injured employee, as well as appropriate support and information for his family. Early return to work is another thing most dealers know about, but often conclude is too much hassle. Well, as injury costs soar, the hassle factor stays about the same, but the benefits of early return to work increase, and just may start to outweigh the hassle. As for medical care, choose your designated medical provider with care, and maintain liaison both with the treating physician and the carrier’s designated claims representative.

We could go on, but the point is clear: with higher worker’s compensation premiums, the financial consequences of a high injury rate can imperil the financial health of a dealership. It therefore makes sense for dealership management to focus more on activities that can help limit these premiums.

Contact KPA to discuss how a safety program can lower your worker’s compensation premium.