5 Ways a Safety Program Can Help Your Business

Insurance is one of the biggest expenses for a small business. If there is a way to save, the extra cash flow can help a business immensely.  A well-documented safety program are a solid way to lower what a business pays for insurance coverage. An effective safety program does not have to take an enormous amount of time away from your business.  If implemented properly the program can cause your business to have less injured workers, lower your insurance premium, lower the amount and severity of claims, prevent your businesses insurance rates from increasing when a claim does occur and it can prevent your business from being dropped from coverage altogether.  If a well-documented safety program is implemented properly it will be a win-win situation for both your employees and the bottom-line of your company.

How can a safety program help with your commercial insurance premium?

Here are five ways a well-documented safety program can benefit your business.

Less Inured Workers

 Safety and preventing injuries is simply the right thing to do.  Safety is the right thing for your employees because they will experience less injuries on the job. Safety is the right thing for your business because you will experience less injured workers having to take time away from the job.  This will decrease the stress on the rest of your workforce and it will lower or eliminate costly insurance claims that can be a financial disaster for your business.  Doing the right thing may seem simple and obvious to most business owners, but many businesses do not take the time to implement a thorough safety program and in the long run it costs them immensely.    

 Your business can get a better rate on insurance premium

Insurance carriers are more likely to offer your business better credits and discounts if your organization has a well-documented safety program in place. The program shows that your business operates more like a well-oiled machine and less like a rusty old farm tractor.  Documentation is especially important to this program.  If you do not have documentation of this program, you might as well not have one for insurance purposes.  The documentation will help your agent to negotiate better coverage and for the underwriter at your carrier to offer deeper discounts on premium and more credits toward your policy.

Less Severe Claims

When a thorough safety program is in place, the business will experience less accidents.  The severity of those accidents will be less. Additionally, if you incorporate a return to work program as a part of the program; injured workers will return to work more quickly. This is extremely important for your insurance policy because the quicker a worker returns to work, even in a limited capacity, the more likely they are to return to work permanently. This can impact the amount of a claim.  How much your insurance carrier has to pay out for claims in a given term impacts your businesses experience modification rating.  This is one of the few factors that carriers use to determine what they will charge your business for insurance premium.  When injured workers do not return to work and stay on workers’ compensation for extended times, it can negatively impact your experience modification rating. This rating along with the industry your business operates in are the two most important factors that determine your rate for insurance premium.

When incidents occur, your business is less likely to have insurance premium rates go up.

When accidents occur; more than likely, your rates for commercial insurance are going to increase.  They are less likely to be increased because of just one accident or a string of minor claims, but in the landscaping business eventually a large claim will occur.  This is simply the nature of the business.  If you have a strong safety program in place, your insurance agent can use the program to explain how the claim is more of an outlier and not a signal of how your organization does business.  When a large claim does occur; if a safety program is in place and it is well documented, your insurance agent can use the program to show the underwriter that this incident is not a sign that your business will have more claims in the future.

 Safety Program

Safety programs can prevent your business from being dropped altogether. 

If you have several claims or one large claim during one insurance term, the insurance carrier may consider refusing to offer coverage moving forward.  If this happens and your business cannot find a carrier on the open market to offer coverage for your business you may be forced to buy some coverages from the state provider.  For instance, if your business is looking for workers compensation insurance in California you are already operating in the most expensive state in the country to purchase coverage.  The assigned risk provider is sometimes referred to as the provider of last resort, the state fund or the state pool.  This provider of last resort is typically significantly more expensive than the open market.  In most states once you are forced to purchase coverage from the state provider you must continue purchasing from that provider for a period of usually two or three years.  This is designed to deter businesses form having excessive claims.  A safety program can help prevent this from happening to your business.  Just like how your insurance agent can use a well-documented safety program to prevent an increase in premium they can also use it to find some coverage on the open market.

Toolbox Talks. What are they and are they helpful?

Toolbox Talks is a term that spawned from the construction industry. It refers to when companies or crews would meet briefly in the morning. These informal safety meetings help keep your company’s safety procedures, rules regarding equipment, personal protective equipment, job assignments and expectations on the forefront of your employees’ minds. This type of meeting can be shorter and used more to reinforce formal safety meetings or training programs.

Find out how Toolbox Talks can help your business at myinsurancequestion.com

These meetings help to prevent employees from cutting corners to get a job done more quickly. A prime example is an employee not taking the time to walk back to the truck to get safety glasses. By constantly reminding your staff about safety you can reinforce the importance of safety in your company culture. This can help you as a business owner save money on insurance premium over the course of many years.

It only takes one big claim or many small claims in one policy period to hurt your businesses reputation with an insurance carrier. When your business is not safe it can drive up premium and thus effect the growth of your company.  An even worse result could be having to lay someone off due to the rising cost of insurance.  This does not have to be the case and these Toolbox Talks can help to prevent just that.

How can ToolBox Talks help your business save on commercial insurance?

Obviously some accidents happen and they are not avoidable. Carriers do take that into account when looking quoting your business, especially when you have had a claim. If you have procedures like Toolbox Talks or safety meetings on a regular basis the underwriter may view the loss as more of a shock loss or an uncommon accident. If these talks are in place they are much more likely to view your accident as an outlier and less of a sign of more to come.

When planning topics for your Toolbox Talks you may find it is hard to come up with interesting topics. If you are having trouble coming up with topics to cover your insurance agent or carrier can help you with ideas or even provide some material for you to cover. Insurance carriers and agents want you to have a safe and informed workforce. They want this so they can insure your business for a long time to come. No matter the size of your business or how much work has to be done, you will be able to find the importance and benefits of doing these quick meetings.  Below you will find a quick outline on how to operate a meeting effectively and efficiently. These quick meetings are more to reinforce what you have discussed previously and to act as a quick reminder to your workforce that you want them to be safe.  More importantly, you want the workforce to know that the business culture is one that wants safety on the forefront of the minds of the employees throughout the work day. When safety becomes a habit it benefits not only the business owner but the workforce as well. There is never a better day than today to get started on a structure format to educated and reinforce employee safety. Safety is and always should be a proactive approach instead of a reactive one.

Find out how Toolbox Talks can benefit your business at myinsurancequestion.com

Below is a quick example of a format for Toolbox Talks:

 

  • Focus on one subject per talk
  • Choose a subject that involves your group on hand
  • Avoid vague statements. Be specific and to the point when delivering the message.
  • Give an example of what you expect or from a past experience
  • Leave time for questions or concerns so that everyone leaves on the same page.