Workers’ Comp

Although workers’ compensation insurance protects employees in the event they are injured at work, this type of insurance was originally designed to protect employers from lawsuits filed by workers injured on the job. Such lawsuits threaten small and mid-sized businesses and, at one time, deterred business owners from operating in certain high-risk industries. Workers’ compensation insurance helps employers avoid costly lawsuits, ensuring that a costly accident won’t cost business owners everything they own.

Workers’ Compensation Costs

While workers’ compensation serves as a safety blanket for employees and employers alike, it can be costly. However, employers can ensure that their workers’ compensation costs stay low by first understanding how their premiums are calculated, and then taking proactive measures to reduce workplace incidents. Your industry risk rating, statistical data and mod factor are all considered when determining your workers’ compensation premiums.

Understanding your Mod

The National Council on Compensation Insurance (NCCI) collects and analyzes statistical data to determine if an employer is considered high or low risk within their industry. In addition, one of the main considerations involved in determining a workers’ compensation premium is your mod factor. Mods are calculated based on the statistical loss data of your business. The more accidents you have, and the more severe those incidents are, the higher your mod and the more you’ll pay in premiums.

Taking a Proactive Approach

While you have little control over your industry’s hazard rating, you do have the ability to reduce workplace accidents and keep workers’ compensation costs low. Mod reduction strategies involve the implementation of safety programs and return to work programs, maintaining proper documentation, updating written policies and procedures, and ensuring transparency in employer-employee communications.

To learn more about the mod reduction strategies your business needs to control workers’ compensation costs, contact Beaty Insurance by calling 409-886-1351 or by filling out the form on this page.