From manufacturing to construction to agriculture, most industries involve some level of risk. For workers, these risks require a thoughtful consideration of the payout and potential. For employers, risks require insurance.
Insuring your employees against injury and illness has long been one of the basic costs of doing business. However, relying on insurance alone will benefit neither you nor your workers. Ultimately, keeping workers safe and costs under control requires preventive practices and safe behaviors.
A well-planned safety program is the best way to implement these practices into your workers’ day-to-day workflows. In fact, the Occupational Health and Safety Administration (OSHA) has determined that successful health and safety programs reduce injury and illness costs by 20 to 40 percent. The following are a few of the most important ways a safety management system reduces costs to insurance companies and, ultimately, to you.
A clean workplace is a safe workplace, and most safety programs include housekeeping policies and procedures. Clearing clutter, cleaning spills and properly disposing of hazardous waste can significantly reduce incident rates, and insurance auditors will certainly take note of a clean worksite.
Likewise, lockout tagout, equipment maintenance and the management of hazardous chemicals will all become more efficient and reliable with a solid safety program. Clear, consistent procedures for keeping track of these variables will make your workers safer–and your company more insurable.
Knowledge is power, and consistent safety training invariably improves incident rates. The same is true for team- and task-specific procedural training designed to promote the safest, most efficient methods of performing dangerous tasks.
For many companies, however, consistent training presents a variety of logistical problems. Which team members have completed all required training? When do policy changes warrant new training? Who should be re-trained in light of recent incidents? If your safety program includes a training management system that helps you answer these questions, you’ll be able to prove to insurers that your workers are up to speed.
Lower Litigation Costs
Hopefully, a sound safety program and adequate workers’ compensation coverage will help you avoid litigation whenever possible. If an incident does make it to court, however, well-documented safety policies will help you make the case that you did everything in your power to protect your workers. The same documentation will also help you spot gaps in your preventive practices, so you can address hazards before they cause accidents.
Lower Workers’ Compensation Costs
Workers’ compensation insurance is one of the biggest costs for companies in mining, construction and other heavy industries, and it’s often mandatory to provide. In attempts to avoid legal trouble and manage risk, many organizations also buy more coverage than they need.
Even if you err on the conservative side, you can likely lower your costs by implementing a safety program. Premiums are typically determined by payroll, company classification and a claims experience modifier. The first two factors won’t change, but the third can be reduced with fewer and less severe incidents.
Improving Employee Health
There’s more to worker safety than spotting hazards and preventing accidents. A comprehensive safety program should also safeguard employees’ health, both physical and mental. While wellness and mental health initiatives do include upfront costs, their long-term impacts will save you money and improve productivity in the long run. A happy, healthy workforce will have higher productivity and morale, and you may be able to negotiate for lower health insurance premiums.
High-risk industries such as construction and agriculture also tend to involve significant variance in revenue, both seasonally and from year to year. Weather, demand and even changing political environments can all make it tough to predict future contracts.
While most of these factors are out of your control, you can improve your cash flow with greater productivity–and productivity with a safer workplace. If your company requires revenue protection insurance, a consistent safety program may help to reduce your premiums.
Reducing Incident Rates with Safety Management Software
Overall, insurers will offer lower rates and more favorable terms to companies that prove they’re doing everything in their power to protect their workers. Auditors also want to see that workers themselves are empowered to take control of their safety through training, documentation and transparent records.
Of course, keeping track of these variables is easier said than done. Between OSHA mandates and internal demands, safety managers certainly have their hands full!
To take control of your safety program, consider BasicSafe–a comprehensive safety software suite that keeps all of your critical data in one central repository. With modules for incident reporting, JSAs, training management and more, you’ll always have the data you need. Without them, you may find yourself running several risks. To learn more, download our eBook, Why You’re at Risk Without a Safety Management System.