Understanding Loss-Sensitive Workers’ Compensation Programs

Workers’ compensation insurance is essential across numerous industries. The risk of an injured employee is not something to take lightly — both for the obvious health and safety risks to a person on your staff, and for the significant risks to your company’s bottom line. Knowing the details of your company’s workers’ compensation program — and understanding what constitutes and when to secure loss-sensitive workers’ compensation programs — is essential to protecting your business and staff.

What Are Loss-Sensitive Workers’ Compensation Programs?

In a nutshell, loss-sensitive workers’ compensation programs are policies in which the ultimate cost of carrying insurance is dependent upon any losses that occur during the policy term. Rather than paying one standard and unchanging cost, premiums will be affected by any claims processed.

Such programs can be beneficial to employers by fiscally incentivizing them to establish more effective safety procedures for workers. This may include additional trainings, better safety gear and additional PPE, stricter hiring practices, and other benefits that can reduce the risk of an injury or accident on the job.

It is a good idea to speak to an experienced insurer about your workers’ compensation insurance, and about establishing a loss-sensitive program, in order to cut costs and more effectively protect your business assets and employees.

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