There are many costs associated with running a successful business. It’s very important to cut expenses where possible to ensure that your revenue goes where it counts and your business remains profitable. If you are looking to reduce your company’s expenditures, don’t overlook ways to save on workers’ compensation insurance. Decreasing workers’ comp insurance premiums is an efficient way to cut your company’s expenses.

There are several ways your company may be able to reduce its workers compensation costs.

One way is by reducing the number of employee worker’s compensation claims. Reducing the number of employee claims is a straight-forward way to reduce the costs your company pays out in worker’s compensation premiums. Worker’s compensation insurance premiums are higher for companies that have higher numbers of claims when compared to other companies. More claims, means higher premiums.

Another way to reduce worker’s compensation costs is to reduce your company’s e-mod rates. High experience modifier rates = higher premiums. Companies that have a higher number of claims and that have paid out a higher total of worker’s compensation benefits will have a higher e-mod rate.

Implementing strategies to lower the number of employee claims will also reduce the amount of benefits paid to employees overall. This will in time reduce their company’s e-mod rates, lowering their worker’s compensation premiums.

Some companies may be able to save on their Worker’s Compensation costs by making sure they have placed their employees in the lowest risk legitimate NCCI class codes. Since certain NCCI class codes are higher risk than others. Making sure your company has accurately matched the work your employees do, with the appropriate class codes may provide cost savings if you can legitimately classify some employees in having lower risk jobs.

Partnering with a PEO (Professional Employment Organization) like Diamond PEO is another great way to help reduce your company’s worker’s compensation costs. We have access to lower cost policies and can help your company implement the changes it may need to take to lower its worker’s compensation premiums.

In our next blog we’ll explore more proven strategies your company can implement to reduce claims and overall workers compensations costs.