There are numerous factors that determine your landscape company’s insurance premiums. While some elements are beyond your control, improving your risk profile is an area you can influence.
How often you have claims, their severity, claim costs and the nature of your business all shape your insurance risk profile.
Lower Your Frequency of Claims
The frequency of claims is the number of workers’ compensation claims you average per million dollars in payroll. Review how many workers’ comp claims you have versus other landscape companies in your area. If your frequency rate is higher than average, your insurance premiums will be higher.
You can lower the frequency of your claims by reviewing the types of accidents that are occurring. For instance, if back injuries are common, you may pinpoint that the proper lifting form hasn’t been taught. Educate your crews on the correct form and implement a morning stretch routine to mitigate this issue.
Also, evaluate your company’s ‘near misses.’ Address these as if they were a claim and strategize how to prevent them from occurring again.
Research has shown that at or near 50 percent of all workplace injuries are suffered by employees with less than 12 months of experience on the job, so make a point to focus on safety training when onboarding new hires.
Hands-on training and working one-on-one with your new team members are the best ways to make sure they are trained and safe in all aspects of their job. Assigning a buddy to new hires can provide them with someone they feel comfortable asking questions to, and the tenured employee can advise them on safety matters.
Don’t assume that new employees know how to operate certain pieces of equipment or what PPE to wear, even if they have industry experience. In some cases, they may not be accustomed to a safety-first company culture.
Instead of focusing on the negative outcomes, develop sound, safety habits that are easy for all employees to follow.
Decrease Lost Time Claims
Your lost time claims are where employees lose time away from work. You can reduce your indemnity by having an aggressive return-to-work program. This is where you can bring back an injured team member with a modified work plan.
Even if an employee is riding with a supervisor or filing paperwork, they’re at work earning their paycheck. This eliminates temporary disability payments from the claim cost. It also shifts the employee’s focus from pain to recovery.
“Studies have shown that the longer somebody is out of work, the less likely they are to ever come back to work at all,” says Margaret Hartmann, senior vice president and chief marketing officer for Berkshire Hathaway Homestate Companies. “Permanent disability claims are often litigated and more costly so it is important for employers to get injured workers back into the workplace and on the road to recovery as quickly as possible.”
Develop a return-to-work program before injuries occur, so you have modified duties already outlined. Create formalized job descriptions for these temporary physical limitations, such as a team member who can’t lift over 10 pounds or stand for more than 20 minutes. Craft effective positions that are specific to the employee, rather than mere busy work. Adjust the workload every 30, 60 or 90 days as the employee improves.
Have a point person who is in charge of your return-to-work program. They should check in regularly with the injured worker and ensure crew leaders are aware of an injured worker’s need for light-duty work.
With an effective return-to-work program, you will have minimal lost time claims, allowing underwriters to be more aggressive when analyzing your risk profile.
Reduce Average Claim Cost
High claim costs can indicate to insurance companies you have a higher risk profile. One way to reduce your claim costs is report all work-related injuries in a timely manner.
Don’t put off reporting an incident in the hopes an injury will just go away. It’s better to take each indent seriously and ensure the employee is evaluated as soon as possible. Studies have shown that when accidents are reported within the first five days have a dramatically lower average claim cost and litigation rates than those reported after five days.
It’s also important to provide thorough details as your insurance provider can’t help manage your claims until they have all the necessary information.
“I think the piece a lot of business owners miss is creating that relationship with your insurance carrier so that you have a stronger outcome, stronger communication,” says Drew Garcia, vice president of Rancho Mesa Insurance Services and Landscape Group Leader.
Rancho Mesa offers a free, fillable, carrier-approved accident investigation report you can use to capture these details here.
Proactively Communicate When Adding New Services
The type of services you offer determines if you have a higher exposure to injury. Operations such as tree trimming and snow removal tend to have heavier exposure so it’s important to have safety programs in place to mitigate claims from occurring.
Informing your carrier well in advance of adding one of these higher-risk services can ensure you have the proper coverage.
“It might seem incidental to a company if they say we’re going to take on holiday lighting, or we’re going to do snow removal now during the winter, and it might sound very practical and easy to do, but those are things that you need to run through your insurance carrier first to make sure they’re aware of the exposure because prior to that, this type of work was not considered for your business,” Garcia says.
Garcia recommends explaining the proof of concept to your insurance carrier, so they know how much thought has gone into the new service offering already. List out your plans to train, reduce or avoid risk on the upfront to make your risk profile more appealing.
NALP’s safety programs are produced in partnership with Rancho Mesa.
