Lowering Your Insurance Costs by Improving Company Safety

1. Lowering Your Insurance Costs by Improving Company Safety

2. Experience Modification Factor

3. Experience Modification Factor • What is it? • How does it affect your premium? • How can you control your mod? • Where can you get your exp. mod?

4. What is it? • Your Experience Mod compares your workers’ compensation claims experience to other employers of similar size operating in the same type of business • Your Experience Mod is calculated by the National Council on Compensation Insurance (NCCI) or in some states an independent agency

5. What is it? (cont.) • If you are at the industry average, your Experience Mod is a 1.0. If your experience is 20% better than average your Experience Mod would be a .80 or 20% worse 1.20. • It includes 3 years. For instance if your renewal date is 1/1/10, your experience mod will be calculated from your losses in 2006, 2007, and 2008.

6. How does it affect your premium? Manual Premium - $62,106  Experience Modifier - .73Discount/Surcharge - $16,769 discountModified Premium - $45,337 Experience Modifier - 1.00Discount/Surcharge - NeitherModified Premium - $62,106 Experience Modifier - 1.43Discount/Surcharge - $26,706 SurchargeModified Premium - $88,812

7. How can you control your mod? • Establish a safety program and try preventative plans to reduce accidents (i.e. safety training programs) • Accident investigation plan and corrective actions • Report claims promptly • An active claims management program • Implement a RTW (Return To Work) program

8. Where can you get your exp. mod? • Typically you will receive an Experience Modification Rating Sheet each year prior to your policy renewal date. • If you are unclear of your company’s current Experience Mod your insurance agent can help you locate this.

9. Safety Pays • Accidents/injuries cost the U.S. up to $170 billion per year • Successful safety programs can reduce injury and illness costs by 20-40% • The cost of injury prevention is much less than the cost of an injury

10. Safety Pays (cont.) • A company with safety and health leadership has… • fewer injuries • more satisfied and productive employees • employees who return to work quickly after an injury or illness • employees who produce higher-quality products and services

11. Promote an Effective Safety Culture • Safety awareness • Safety slogan contest • Safety logo contest • Use a team approach • Monthly safety meetings • Use paycheck stuffers • Post safety information on an intranet or sign-on page • Safety & Health newsletter • Walk-around inspections • Daily, weekly, monthly safety talk – tailgate talks

12. Promote an Effective Safety Culture (cont.) • Appropriate and immediate response to accidents • Train-the-trainer programs • Posted safety statistics • Safety bulletin boards • Communication and support • Clear and obtainable goals • Safety box – suggestion box • Sticker or pin for promoting safety • Incentive programs • Develop a Safety Committee

13. Reward/incentive programs • What should a safety reward/incentive program focus on? • reporting injuries immediately, no matter how minor • warning coworkers and reporting hazards • submitting safety suggestions • attending safety meetings • doing hazard analyses • reporting near misses • practicing safe behaviors • The program should not focus on reducing injury rates in a way that discourages employees from reporting injuries and illnesses • Use smaller incentives that can be awarded more often • Communicate throughout the process, sending clear messages that under-reporting or non-reporting of accidents or incidents will not be tolerated!

14. Return to Work Program • Objective is to assist an employee in returning to work as soon as it is medically feasible after an injury or illness • Keeps employees active during their recovery and reduces their recovery time • Allows for them to collect full or partial wages and brings their income closer to their wages before their injury or illness • Provides physical conditioning through an active work schedule and increases the probability that the employee will return to work permanently • Provides a feeling of job security

15. Direct savings: A reduction in workers’ compensation costs by reducing the length of the disability Increase in productivity while an injured employee recovers from their injury Reduction in medical costs and reduced recovery time Lower workers’ compensation costs may lead to lower insurance premiums Indirect savings: Costs for recruiting & hiring new employees may be reduced Employer is perceived as caring about their employees Improved relations between employees and management Improved employee morale and public relations Receive production for wages being paid to an employee who would otherwise be out of work Return to Work Program (cont.)

16. Safety Committee Mission The purpose of a safety committee is to bring workers and management together in a non-adversarial, cooperative effort to promote safety and health in each workplace. A safety committee assists the employer and makes recommendations for change.

17. Safety Committee - Roles • Address employees’ safety and health concerns • Review accidents, near miss incidents, and unsafe workplace conditions • Conduct workplace inspections and make recommendations • Help with accident investigations • Minutes of meeting should be kept and made available to all employees

18. Accident Investigation • Have a plan in place on how to handle the accident before the accident occurs! • Plan procedures: • Remember the purpose of the process (fix the problem not place the blame) • Who should be notified? • Who notifies outside agencies (fire, ambulance, police, etc.)? • Who is responsible for conducting the investigation? • Training needed? • Who receives and acts on reports? • Timetables set for correcting the hazards.

19. Accident Investigation (cont.) • Why should accident investigations be completed? • To find out… • details of accident • events leading up to the accident • who was involved • were proper procedures not followed; did equipment fail • The information obtained will help to prevent a similar occurrence

20. Accident Investigation (cont.) • Tools that should be kept on hand • Pen/pencil and paper • Camera and/or video camera • Tape measure • Any PPE (personal protective equipment) that is required • Accident Investigation Report • Rope or tape to secure area if needed • List of Accident Investigation procedures • Accident Investigations should be completely ASAP

21. Steps to an Accident Investigation • Report the accident to the designated person(s) • Medical care should be provided if necessary and make sure to prevent further injuries and/or damage • Complete accident investigation • Identify all causes • Report the findings of the investigation • Develop a corrective action plan • Implement the plan • Evaluate the effectiveness of the corrective action • Make any necessary changes

24. JSA – Job Safety Analysis • Used to define and control the hazards associated with a certain process, job or procedure • The whole job process is broken down into small steps in a table form • The hazards for each step are identified • Identify control measures to eliminate, reduce or mitigate each hazard • What’s the value of a JSA? • Results in fewer worker injuries and illnesses, safer, more effective work methods, reduced workers’ compensation costs, and increased worker productivity • They can also be used for training new employees

25. Jobs for JSA’s • Jobs with the highest injury or illness rates • Jobs with the potential to cause severe or disabling injuries or illness, even though there is no history of this • Jobs in which one simple human error could lead to a severe accident or injury • Jobs that are new to your operation or have undergone changes in processes or procedures • Jobs complex enough to require written instructions

26. Theft Prevention • Size of the Problem • 300 Million to 1 Billion per Year (For heavy equipment only) • Does not include • Tools • Materials • Business interruption • Crew downtime • Contractual penalties • Increased insurance premiums • Replacement or rental costs

27. Value – Primary factor How much is it worth? Mobility – Size Can it be moved easily? Age of equipment Newer equipment has higher re-sale values. 3 Key Factors Of Equipment That Is Stolen • Cost of new equipment • Skid Steers – $15,000 to $30,000 • Forklifts - $20,000 - $40,000 • Tractors - $30,000 to $50,000 • Backhoe Loaders – $45,000 to $70,000 It is estimated that less than 10% of stolen equipment is recovered.

28. Protecting your equipment Re-key your equipment Don’t leave equipment in remote locations Inventory your equipment frequently Have designated storage areas so you know if something is missing Paint your equipment a unique color Include your company name & logo Install & use anti-theft devices What can you do?

29. Theft prevention • Equipment • Owner applied number • Register with NER (National Equipment Registry) • Electronic Article Surveillance (EAS) Security System • Alarm activated if the tool goes past the gate • Equipment locks • Device that can disable fuel, hydraulics, and/or electrical systems • GPS tracking devices

30. Equipment Anchor with either chain or cable (painted a bright color) Remove wires or battery Lower all blades or buckets Remove tires if the equipment will be there for a long time Disable or remove the hitch on trailers Place large pieces of equipment around smaller pieces of equipment (i.e. generators, compressors and other small items) Assign a supervisor to check items Try to avoid leaving items on an unattended trailer Theft prevention (cont.)

31. Theft Prevention (cont.) • Site Security • Post “Warning; No Trespassing” signs • Fence area or use barriers • Locked gates • Lighting, motion sensors • Keep track of all keys for equipment and locks

32. Driver Safety • Driver safety program • Written policies and procedures • Monitoring programs • What to do in case of an accident • Cell phone policy

33. Hiring practices Interview/application Drug testing/medical exams Checking MVR/calling previous employers Written rules for operating company vehicles Seatbelts usage Obey traffic laws Cell phone policy Driver Qualification Standards Number of at-fault accidents Number of traffic violations No serious violations (i.e. DUI/DWI, wreckless driving, etc.) Personal usage policy Preventative maintenance Training Accident procedures Written policies and procedures

34. Training • Training • Defensive Driving • Accident Prevention • Equipment Care and Operation • Accident and Breakdown Reporting • Road Tests

35. Monitoring programs • Decal program • GPS program • In-vehicle video system

36. Cell phone policy • Drivers are four times more likely to be in a vehicle accident when they are talking on a cell phone (NSC) • Decide what your policy should state, i.e. banning all cell phone usage, just allowing cell phone usage in emergencies while pulled over safely, or allowing quick phone calls while using a hands-free device, etc. • Have employees sign the company policy

37. Cell phone policy - links • For more information on cell phone safety please visit the following links: • National Safety Council  -  www.nsc.org • Free kit available including posters, a PowerPoint, and a sample written program • Governor’s Highway Safety Association www.ghsa.org • Current laws, articles • SafetyXChange - http://www.safetyxchange.org/tools/sample-company-cell-phone-policy-2 • Sample policy

38. The End • Any Questions ??