As a business owner, you probably face numerous challenges operating your company. After you’ve come up with an idea and brought your company to life, the next daunting task is to keep it up and running. Sales, marketing, customer service, budgeting, and payrolls all add to the pressure, and you also have workers’ compensation to deal with.
If you feel like that’s a lot to take in, don’t fret. Here we go over everything you need to know about employee compensation and how to find a more budget-friendly policy.
Along with the responsibility of managing your team, you will need to address your employees’ job-related risks. After all, you need to protect your business from potential lawsuits.
Workers’ compensation provides coverage for employees that have injured themselves or become ill in the workplace. Among its benefits are hospital expenses, ongoing medical care, lost wages during recovery, and, if necessary, funeral expenses.
The cost of premiums for this insurance depends on many factors, including your location and industry niche. In general, businesses with a history of little to no injuries pay much lower premiums than those with many recorded accidents.
The first and most important consideration is to become familiar with your state’s compensation regulations. Many states require businesses with one or more workers to carry compensation insurance. Some of the most important questions to answer are:
- How many employees do I have? Are they full-time, part-time, temporary, or seasonal workers? Do I have family members working for me?
- Which types of employees qualify for workers’ compensation under my state laws?
- What is my industry classification code? In the U.S., these are four-digit codes known as class codes used to categorize employees, with each type of job assigned a unique number. Each class code is associated with a rate that is factored in when calculating the cost of coverage.
After all that is taken care of, you need to figure out how to simplify the process of reducing your workers’ compensation costs. We’ve broken it down into four easy steps:
- Use proper job classifications–and stick to them!
While budding businesses may not have the funds for multiple specialized employees, you can reduce risk in the workplace and lower your insurance premiums by crafting appropriate job descriptions and sticking to them.
Defining each position helps you hire appropriate workers and keeps workers from performing duties outside their roles. For example, your carpenter won’t have to fix power outlets or repair office equipment. Aside from preventing injuries, sticking to the assigned class codes also helps you avoid insurance problems in case of an accident.
- Create a documented safety program
As early as possible, it’s important to have a safety program that can be used during the onboarding of new hires or even as a handy reminder for your team. Depending on the work environment, it can be as simple as a list of do’s and don’ts or a more complex plan. These documents will show insurance companies and other evaluating agencies that you are doing your best to protect your employees’ safety.
- Encourage a substance-free workplace
Many accidents occur under the influence of drugs and alcohol. Aside from keeping your company substance-free, it is also important to consider your workers’ state of mind and physical health. Although running an understaffed business is hard, it is just as important to have healthy and well-rested workers to prevent accidents.
- Introduce a return-to-work program
Although return-to-work programs are more applicable to larger companies, it can be worth having one in your firm. This program makes it easier for workers that have been sick or injured to return to their jobs.
Studies have shown that return-to-work programs reduce hiring costs, lower turnover rates, and boost employee morale by relieving workers of stress and uncertainty. You can assign a coordinator to prepare this document and create a list of transitional jobs that an injured employee can handle while recovering from illness or injury.
Rodrian Insurance
Rodrian Insurance specializes in giving you insurance solutions that perfectly match your business and personal life. We provide insurance options that offer excellent coverage while remaining within your budget, based on a thorough understanding and assessment of your needs, circumstances, and financial capability. Find out more about how Rodrian Insurance can fulfill your insurance needs. Call or text us at (262) 352-4741 or email us at info@rodrian.com.
