WORKPLACE SAFETY
How Workplace Safety Could Affect Your
Bottom Line
E
veryone wants a safe workplace.
The issue isn’t whether people
want it; it’s whether they are
willing to do the things that need
to be done to actually attain it.
The companies that do so not only have
a more attractive work environment for
their employees, but they are often saving
a substantial amount of money on their
workers’ compensation premiums year
over year because of it. The companies that
do not? Well, their employees are getting
injured more often, and they are sabotaging
their own bottom line.
Why? What is the difference, monetarily?
The answer to that lies in the mod. Each
state has its own workers’ compensation
bureau which comes up with an experience
mod based on company history. The
underwriter at the insurance carrier will
then decide how much “schedule credit”
to apply to a policy based on loss ratio,
experience mod, and a number of other
factors. The mod itself is a lot like a driving
record. It is a 3-year history that looks at
payroll and the claims dollars that your
insurance company has spent, including
reserves.
An average mod is 1.00, which basically
means it is not modifying your premium
at all. A 1.00 isn’t going to hurt your
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company, but it isn’t doing you any favors
either. How big of a difference could this
make? Let’s imagine a company with a 1.62
mod. That means that they have a 62%
surcharge on workers’ compensation. That
could easily equate to tens (or hundreds)
of thousands of dollars that they have
to spend which is ultimately wasted.
Spending the time to be proactive about
safety would solve that issue for them.
Here is another thing to note: a mod lower
than 1.00 has the same effect on your
premium. You can save money by lowering
your premium simply by having a lower
mod. How is that done? Be aggressive
about safety. Stay proactive. Make it a
priority and make sure everyone knows it
is a priority.
Personally, when I want to determine
how well a company is doing in terms of
safety, I look at the mod first. Then I look
at what the owners are doing for safety.
Finally, I start looking for things that
showcase a safety culture, such as signs
in the breakroom and the lunchroom.
In my experience, high mod companies
often have an “us vs. them” mentality.
Management vs. employees. Management
vs. regulators. I bet it isn’t surprising that
the owners of these companies often
don’t attend safety meetings. In low mod
companies, I find a lot of team focus,
safety culture, and the owners make their
presence felt during safety programs.
How is your safety program looking?
Ready to make some changes and start
lowering your premiums? I’m ready to help.
Give me a call at (586) 843-2774 and we
can get started.
BY: CRAIG DEAN
STERLING INSURANCE
GROUP
Craig Dean has handled commercial
insurance programs for over 20 years.
He has international clients in the
manufacturing, distributing, property
management, and technology sectors.
Craig utilizes a process that improves his
clients’ risk profiles, which ultimately is
reflected in lower insurance costs. Reach
him today: [email protected], or
(586) 843-2774.