Today, workplace safety, employee screening, and other risk management practices are being viewed by successful companies as a way to improve the bottom line. Why? Because expenses related to workers compensation claims, auto accidents, medical costs, legal fees, lost production time, and stolen or damaged equipment can quickly add up. Not to mention the fact that it’s impossible to put a price tag on an employee who has been seriously injured or killed on the job.
Every injury, every lawsuit, every poor hire, every missed opportunity to plan for the future can pull money away from your bottom line. A single injury claim can cost tens of thousands of dollars in both insured and uninsured costs. Insurance is designed to pay for the direct costs, such as property damage, medical bills, and legal expenses. But, who pays for the hidden costs of losses, such as expenses related to hiring and training a new employee, lost productivity, lowered employee morale, damaged company reputation, and higher insurance premiums that can result from higher experience ratings? The answer is you.
Think about that: A chunk of your profits can be lost every time an employee slips, strains, falls, or fails to follow company policies and procedures. Even seemingly small injuries can result in major financial consequences. Of the estimated $53 billion American employers pay in direct workers compensation costs every year, more than $13 billion is a result of injuries caused by employees simply overexerting their bodies.*
Even the best businesses can get better. A risk management culture—the sum total of all the efforts, attitudes, and investments related to workplace safety and preventing losses at your business—can help protect your people and your profits. From senior management to front line employees, making risk management a top priority can have a significant financial impact, ultimately helping you achieve your vision for the future of your business.
In speaking with business owners across the country, Federated Insurance repeatedly heard four points regarding risk management and the impact it has on businesses.
- It has to start at the top. Management should model good behavior, reinforce a “safety-first” message, and invest the time and resources to implement sound policies and procedures. Without their buy-in, it’s difficult to establish a successful risk management culture.
- Empower employees. Give employees the tools and incentive to take ownership in a risk management culture. Conduct regular safety meetings, provide personal protection equipment, and set clear expectations. Then, reinforce positive behavior with recognition, compensation, or other rewards.
- Take Control. A significant number of the claims experienced by Federated policyholders are preventable. Take control by developing and enforcing policies related to safety, conduct, and hiring. Designating a single employee to surround these critical practices is one way to take the reins.
- It has a financial impact. “Hidden” expenses related losses can quickly add up. Additionally, losses can impact your workers compensation experience mod which can lead to higher insurance costs.
The good news is you don’t have to do it alone. Federated Insurance provides clients with an annual Risk Control ReviewSM. As one of its Major Client Service Standards, Federated’s Risk Control Review is designed to help identify ways to better protect your money and your employees. Federated also supports your risk management culture with a variety of loss prevention tools, employee training and screening materials, and personal consultation services through its Risk Management Resource Center.
In a competitive business world, where the pressure to turn a profit is often the highest priority, it’s tempting to sweep risk management under the rug. But, turning a blind eye to this critical issue can be one of the most costly decisions you ever make. With your vision clearly focused on a risk management culture, you can positively impact your bottom line. Contact your local Federated marketing representative to learn more about how a Risk Control Review can benefit you—it may be the most impactful call you make all year.
*Source: “National Safety Council Injury Facts 2012 Edition.” National Safety Council. 2012
This article is for general information and recommendations regarding risk prevention and should not be considered legal advice. The recommendations herein are not a guarantee of the reduction or elimination of any risk of loss. The information provided is accurate as of November 2012 and is subject to change. Qualified counsel should be sought for questions specific to your circumstances. © 2012 Federated Mutual Insurance Company. All rights reserved.