How Can You Control Workers' Compensation Costs?

Regardless of the industry you're in, the best way to control the cost of workers' compensation insurance premiums is to avoid injury claims. A safe environment, effective safety training, and ongoing programs to promote safe work habits are keys to preventing employee injury.

Once new employees

are properly trained to perform their jobs safely, it's important to maintain safety awareness. In addition to posting safety reminders in common areas, consider holding workshops or hosting safety seminars to talk in depth about the specific issues affecting workers. Providing incentives for good safety records is also a good idea.

In most states, workers' compensation is "no fault." That means that on-the-job injuries are covered by workers' compensation insurance, regardless of the cause of the accident. In other words, if employees are injured on the job due to their foolish or careless behavior, those accidents are covered by your workers' compensation insurance. This is why it's crucial to continually promote safety awareness and safe work habits.

Using the proper industry classification codes for your employees is another important factor in controlling workers' compensation rates. There are more than 600 different codes that identify professions with the greatest risk of on-the-job injury. A common mistake employers make is to classify their entire staff under a single code. Needless to say, few companies employ a single type of employee to run a business.

Another common but easily avoided classification error is to assign the code of office clerk to all administrative personnel. Not all administrative personnel perform the same job duties, and there are different classifications that carry different levels of risk. A file clerk, for example, typically doesn't use a keyboard. A data entry clerk, on the other hand, usually sits in front of a keyboard and a computer all day long — and runs a much higher risk of carpal tunnel injury.

To be certain you're classifying employees correctly, use the most up-to-date classification code book for your state, and thoroughly familiarize yourself with the appropriate codes for your employees.