As we learned in our last blog, “Explain Like I’m 5: Modification Factor,” experience modification factor calculations impact workers’ compensation insurance premium costs. Controlling your mod makes your company not only more safety conscious, but also more competitive by lowering overhead costs.
With this in mind, how can we control our mod and overhead costs? Through strategic risk management. Approaching safety proactively means avoiding claims altogether, which is the best-case scenario. This is especially true for captive members whose insurance premiums are based solely on their own loss history.
With every risk comes costs and mitigation options. For example:
Your company has a fleet of vehicles, but a motor vehicle accident can result in bodily injury to the employees operating and/or occupying the vehicle. As far as workers’ compensation costs are concerned, there may be medical bills, lost time from work, and additional resources used to recruit, train, and pay a temporary employee.
In this scenario, your organization has a couple of options. You can eliminate your fleet of vehicles and their function entirely, which rids your organization from the risk altogether, but likely isn’t a practical option. Your more reasonable option would be to implement driver safety training for your employees and install safety features into your vehicles or invest in a fleet that already has them.
More often than not, the most practical means of mitigation is not eliminating the risk but managing it. Making workplace safety a priority not only helps control costs but also impacts employee morale and productivity.
Risk Management & Workplace Safety efforts include such things as:
Written safety policy and rules
Regularly updated and mandated training
Safety inspections and preventative maintenance
Injury investigation and OSHA-compliant record-keeping
This information is for educational purposes only. As licensed insurance professionals, we can provide more detail and guidance for your specific needs. Contact email@example.com to get started.
About Valley Forge Captive Advisors
Valley Forge Captive Advisors is a commercial insurance brokerage and risk management firm specializing in member-owned group captive insurance companies in King of Prussia, PA.