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How Workers’ Compensation and Loss Control Can Work Together

How Workers’ Compensation and Loss Control Can Work TogetherIn regards to controlling workers’ compensation costs, the traditional approach has always been to focus on reactively managing claims, beginning at the time of loss and continuing through the life of the claim. While having a comprehensive post-loss approach is an important aspect of workers’ compensation cost control and should absolutely be included as part of an organization’s risk management program, it should not be the main focus. A post-loss approach, on its own, does not address all of the important elements in workers’ compensation cost control. As more organizations are becoming aware of shifting trends and improved cost control methods more focus has been placed on injury prevention and loss control.

Loss control takes a more proactive approach to reducing injuries and cutting costs. The key to workers’ compensation loss control is making the workplace as a whole safer by implementing and consistently managing proper safety and injury prevention programs. Historically, these types of programs have not been viewed by organizations as a cost reduction strategy, but rather as a necessity to maintain regulatory compliance with state and federal agencies such as the Occupational Safety and Health Administration (OSHA). However, research shows that when an organization invests in safety, they often greatly increase their return. According to the National Safety Council’s 2014 “Injury Facts” report, each dollar invested into injury prevention sees returns of between two and six dollars.

“When a workplace is safer, less workplace injuries occur.”

There are four main steps to creating a successful loss control program:

1. Assessment

An assessment of hazards and safety opportunities should be conducted by either a loss control professional or members of an internal safety committee; which, by OSHA’s recommendation, should be two managers plus two responsible and reliable employees. The object of the assessment is to look for any hazards that could pose a threat to workplace safety as well as note any common injuries in past workers’ comp claims. Risks will vary depending upon the workplace environment. For example, a manufacturing plant will have different risks than a medical office, but knowing what the risks are helps create a foundation for the next step.

2. Creating an Action Plan

Using the information from assessment, identify each independent risk and provide a solution to reduce or eliminate the risk to create a customized loss control action plan.

3. Implementation and Training

While the internal safety committee should be tasked with ensuring the action plan is being carried out effectively, some training is necessary to educate all employees on properly observing the loss control program guidelines.

4. Documentation and Record Keeping

Accurate and detailed records should be kept, not only to maintain compliance with OSHA and other regulatory agencies, but also to create accountability and enable the organization to learn from past experiences and prevent repeated incidents in the future.

Taking a strategic approach to workers compensation loss control does more makes the workplace safer for employees so that less injuries occur in general. Not only does this result in lower workers’ compensation insurance premiums for employers, it improves the overall productivity of employees, decreases turnover, reduces overtime costs and impacts the organization’s bottom line in a very positive way.

About ASIA Workers’ Compensation

Associated Specialty Insurance Agency, Inc. has been “The Workers’ Compensation Specialist for Brokers and Agents” for the past two decades and is committed to providing brokers and insurance agents across the East Coast with expertise and services to develop a Workers’ Compensation policy. For more information about how we can assist you with claims management, anti-fraud measures, and more call (610) 543-5510 to speak with one of our professionals.

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