Articles >> How to put a cap on workers' comp costs

Workers' compensation costs continue to rise and cause pain to more and more small companies. They're even threatening the existence of some businesses in certain states.

The trend is not likely to change anytime soon.

Workers' compensation premiums are based in part on things over which you have little control, such as the type of industry you're

company is in, and the state or region of a state where you are located.

But rates also are based partly on things over which you do have some control: your history of workers' compensation claims and payments.

Here are five ways you can ensure that your workers' comp costs are no higher than they have to be.

1. Make safety a common goal, not an area of friction.

James Walsh, author of "Workers' Comp for Employers: How to Cut Claims, Reduce Premiums, and Stay Out of Trouble," says there is actually a psychological component to employee attitudes about making workers' comp claims. "If you have a workplace where employees and managers are angry at each other, you are going to have more workers' comp complaints, and bigger claims," he says.Having an active safety program can reduce friction and produce several benefits. "Things like rotating schedules or

rotating tasks and having workers perform a variety of activities can reduce repetitive-stress injury problems while also keeping people sharper and more interested in what they are doing," Walsh says. "Real and meaningful work breaks help serve the same function.""A training program also tells the employees that having claims is costly, and that you are not trying to run a sweatshop," Walsh adds. "The message gets through that everyone has a vested interest in minimizing these costs. When employees realize that workers' comp is a benefits cost that ties in directly to what a company can pay in compensation, they also recognize the advantage of helping reduce those costs."

2. If you've already had claims, institute a better safety program. Walsh says that some insurance underwriters will recognize employer-training programs and health and safety programs as a mitigating factor against bad loss histories."You have a good analogy if you think of health and safety programs and training factors as being like going to traffic school if you get a speeding ticket," he says. "They won't erase your history, but they may reduce the impact of what's previously happened."

3. Don't misrepresent what your employees are doing. Insurance rates are based partly on an employee's occupation.