Safety Programs Help Reduce Workers' Compensation Costs 

Litigation has become big business and can potentially ruin a small business. The costs of a lawsuit going through a jury-trial process are estimated to be at least $100,000. Not many small businesses can withstand a hit like that. 

Small business owners face liability issues the moment they open their door for business. Even greater liabilities are assumed when the first employee is hired or the first customer makes a purchase. Business liability increases with each day that someone is in business. 

Obviously employers want to keep their employees safe from injury or illness. In a small business environment, employees often become like family. Employers want to protect their employees just as they would want to protect a brother or a sister. 

Unfortunately employees do get injured on the job. That is why most employers are required to have workers’ compensation insurance for both coverage and protection. This coverage is very important because injured employees can file claims; so it protects the business as well as the employee.  

What is workers’ compensation? Workers’ compensation is a kind of insurance that provides employees, who become injured or suffer occupational illnesses on the job, with medical and income replacement. Should an employee become disabled due to an on-the-job injury, it may also provide disability benefits.

If an employee is injured on the job, federal or state laws (depending on the industry) require employers to report it. If they don’t, they can face penalties. It is also in the best interest of the employer to report injuries to the insurance carrier for a number of reasons.  For one, it helps protects the employer from future liability. It is also the best way to protect the injured employee so they can receive the medical benefits and care they need. The quicker they recover, the sooner they can return to work. 

Implementing safety programs and preventing hazardous conditions in the workplace provide immeasurable value. The best way to avoid employee injuries or illnesses and possible resulting litigation is to prevent them from occurring in the first place. To help implement a comprehensive safety and health management system, I strongly recommend the services of certified safety professionals. These professionals are highly trained in areas affecting safety and health such as industrial, construction, ergonomics and hygiene.

Another valuable resource is OSHA. As a government agency, their aim is “to ensure employee safety and health in the United States by working with employers and employees to create better working environments.”

OSHA has numerous safety and health programs designed for small businesses, and they also offer free consultation services.  A recent OSHA pilot program provided “stunning” results according to the Society of Human Resource Management (SHRM). A high-risk Ohio employer (in the commercial-construction industry) voluntarily took part in this pilot safety program, as reported by SHRM on April 10, 2008.  After participating in the OSHA program, this company realized “an 85 percent decrease in workplace accidents since 2002, a 75 percent reduction in comp claims, and a drop of almost 99 percent in its payouts for medical and wage replacement benefits over the past four years.”

Check your state laws. As a final note, workers’ compensation coverage requirements vary by state. Be sure and check your state laws.

In a small business environment, employees often become like family. Employers want to protect their employees just as they would want to protect a brother or a sister.