Accidents happen; more realistically, life happens. And because it happens, insurance is meant to lower the financial blow. In 2018, SFM Mutual Insurance filed 17,500 workers’ compensation claims out of 22,000 policy holders. According to Andy Gebhard, vice president of communication, the average is just under one claim per employer each year, and is more prevalent in bigger companies.
The best part? When an accident does happen, insurance covers all of the costs. Great! But when it comes to your monthly premiums, the more accidents that occur, the higher the premium. William Ferreira, lead attorney for the Automotive Defense Specialists, says it works like car insurance. Instead of putting the focus on employee safety, owners skimp on equipment and training just to save money.
“You will eventually pay for it in much higher premiums if you think your insurance company will take care of your negligence,” Gebhard says.
By shifting the focus, shop owners can pay less in premiums and create a safe work environment. Here’s your guide to everything worker’s comp and how to prevent and handle one when it happens.
The Low Down
What are the types of claims?
There are three types of claims: incident only, medical only, and lost time. Incident only is when a report is filed with HR, but the accident doesn’t require medical attention. Medical only is when medical attention is needed, but the employee comes back to work. The priciest claim is lost time. This is when an accident requires medical attention and an absence from work (sadly, this includes death, too).
Types of Claims
- Incident Only
- Medical Only
- Lost Time
What does the claim process look like?
First thing’s first: an employer needs to make sure they’re covered. Gebhard says it’s a requirement by the state. If you have a policy and you pay your premium, your employees are covered.
Tip: Get more people involved if it is more complicated.
Gebhard says a lost-time claim is a big one and can pile up costs. To ensure the worker has the speediest recovery, you may need some outside help.
What do the costs look like?
Incident only is no cost (except for the box of band-aids). When it comes to medical only and lost time, however, there’s a steep range. Medical only can vary from $1,000 to $2,000 to cover medical costs, while lost time can range between $40,000 and $50,000, which includes medical costs and reimbursed wages from when that employee can’t work—the longer the recovery, the steeper the cost for insurance.
Every business is required to get insurance, but premium costs can differ between states. Ferreira says some are state-run; aka, the cost is universal. But if your state’s premiums are an open market, the choice is up to you. So, make sure to do your research for a policy that fits your shop.
The most common injuries are:
- Slips and falls from spills
- Burns from hot oil, hot coolant, or touching hot vehicle parts
So…
How do we avoid injuries?
Have a prepared mindset.
Insurance is in place for a reason: accidents happen. Ferreira says if you have the mindset that it’ll happen, you’ll be prepared and less likely to panic.
“If you have that mindset that something happens, that will give you the best mindset to look for things to avoid it,” Ferreira says. “If it doesn’t happen every couple of years, great, but having that mindset will incentivize you to keep up on equipment.”
Perform regular cleaning.
Simple, daily maintenance can go a long way, according to Ferreira. What he sees a lot in shops is there’s a lack of maintenance on the flooring. He says having a solid rubber footing for the floors will help prevent, but creating an end-of-the-day cleaning checklist will ensure no spills will go unnoticed.
Emphasize safety.
With hot oil around, there’s a chance someone’s going to get burned if they aren’t prepped with the right equipment. Ferreira suggests wearing safety glasses and gloves when performing services, and writing up employees who aren’t following protocol. He says he sees shops with fewer claims put a constant emphasis on safety.
“Most accidents I see involve employees screwing around,” Ferreira says. “They are less likely to screw around when you’re serious about it.”
Be consistent with training.
For employees to know what to look for, hold weekly safety and training meetings. A 15-minute, weekly meeting will do the trick.
“Repetition is important,” Ferreira says. “You get that one second of remembering the procedure and know what to watch out for.”
Ferreira says shop owners should also have policies and procedures written down for reference. When you have safety procedures written down, it’s evidence that you’ve trained employees properly, which minimizes liability (and money that’d go into a claim).
“This will set the basis for no liability because you told them; they signed off on a weekly safety meeting,” Ferreira says. “If they don’t follow those procedures, the negligence shifts from employer to the employee.”
But what if an injury occurs?
Don’t wait to report.
The most important thing to do if an injury occurs? Report it ASAP.
“If you receive any information that an injury occurred, you have to report it right away,” Gebhard says. “There are penalties for late reporting.”
Not only are there penalties, it also makes the shop look more liable and negligent. The reason most shops wait to report an injury is based on fear.
“It’s the fear that shops think of a worse case scenario and they try to minimize this by not reporting it. This is why they have this insurance so you aren’t afraid to call in,” Ferreira says.
By reporting the incident right away, shop owners can save money. Gebhard says the easiest way to report is on your insurance firm’s website.
Put injured workers on light-duty work.
An owner can still have the employee come in and perform administrative work: answering phones, filing paperwork, etc. This way, he or she still gets paid, so the claim wouldn’t be considered lost time and your premium doesn’t go up as much. So, creating an official light-duty program, just in case, would significantly help with the price of your premiums, Ferreira suggests. All it depends on is the seriousness of the injury and approval from a medical professional. If approved, the doctor creates set guidelines for what the employee can and can’t do on the job.
