Given the increasing cost of insurance, industries with consistently higher rates for coverages like workers’ compensation and liability are feeling squeezed more than ever. This, in turn, rolls into higher, less competitive bids on projects or cuts into profitability. Either way, the costs are real and cannot be ignored.

Fortunately, there are a few ways businesses like construction firms and small and mid-sized  companies in other high-risk industries can obtain the insurance they need while actually lowering their costs. Here are the tactics that make it possible:      

Mitigating Employee Risks

Ultimately, experience mods (rate modifications based on a company’s record of claims) will drive workers’ comp insurance costs. But demonstrable efforts to prevent on-the-job injuries can help bring those rates down. Better still, such efforts actually do reduce injury rates and severity. The sooner you start implementing them, the sooner you will see the savings.

Such measures include detailed, job-specific orientation on potential hazards. Even the most experienced professionals can get distracted or complacent. Constant reminders regarding proper tool use and storage, critical protective equipment and its use, and coordination between workers maintains a safer work site. Ideally, this includes a daily routine that aids everyone’s focus.

By standardizing and formalizing such training, you can ensure consistency across all your managers. Where it makes sense, go above and beyond OSHA minimums. The more you can document, the better, including having workers acknowledge receipt of the instruction. This demonstrates a commitment to safety and will help identify any gaps. It might also provide some legal protection in the event of a claim.   

Protection For and Against Subcontractors

The most critical protection in subcontractor relationships is documentation. Reasonable indemnifications in written agreements with them and stipulations of worker qualifications can provide some assurances. Also require proof of insurance, both for general liability as well as workers’ comp. And include acknowledgement of all potential job and site hazards in the contract for the subcontractor’s acceptance.

While you can’t mandate that subcontractors take your training without compensating them, you can insist they provide proof of their own training. This can be especially important if the manager will not always be present when the workers are onsite. In any case, make sure to include subcontractor workers in your routine onsite orientation or be certain they’re conducting their own.

Careful documentation actually serves the goal of minimizing potential hazards and eliminating injuries by forcing best safety practices. But documentation is also valuable in supporting reductions in your own insurance costs. By demonstrating your attention to safety and providing solid protections against adverse judgements, you can be rewarded with lower premiums.

A Deeper Coverage Pool

The best way to lower workers’ comp insurance rates is to participate in a larger risk pool. But if a company in a high-risk industry, like construction and some kinds of manufacturing, is having trouble buying coverage, the most they can hope from an assigned risk pool is the bare minimum at a higher rate.

Another possibility is outsourcing all your HR functions, including insurance, to a Professional Employer Organization (PEO). Because PEOs manage employees for multiple companies, they represent a larger risk pool. And because PEOs serve a range of industries, construction workers may be pooled with lower risk participants, resulting in lower rates for your business.

As a part of their services, better PEOs also serve as risk management consultants, providing critical counsel on how to protect your people and your bottom line. They’ll also supply the necessary training materials that can actually reduce safety incidents and insurance claims. This translates to more favorable experience mods and the lower rates that come with them. They’ll even generate the documentation that insurance underwriters need to support those lower rates.    

Letting VensureHR Cover Your Back

As one of the largest PEOs in the nation, Vensure HR represents one of the largest insurance pools for workers’ comp as well as health, dental, vision, and other kinds of insurance. They also have whole departments dedicated to risk management and loss control. And because the focus of their business is small and mid-sized companies, they are geared to working with general contracting firms at the local and regional scale.

Engaging a PEO like VensureHR can unburden your HR staff from mountains of administrative work and free them to help build buildings instead of just filing forms. To learn all that a PEO can do for you, schedule a no-cost business evaluation  from VensureHR today.