While industries such as manufacturing, construction, healthcare and transportation face significant exposure to hazards and workers compensation claims, no sector is immune from workplace accidents and injuries. In 2022, there were 5,486 workplace fatalities, up 5.7% from 2021, and 2.8 million workplace injury and illness cases in 2022, up 7.5% from 2021, according to the most recent data available from the U.S. Bureau of Labor Statistics.

Workplace injuries and workers comp claims are costly for employers. In 2021 and 2022, the average compensation cost of a strain was $36,200, the average cost of a fall or slip was $49,971, and the average cost of a burn was $52,161, according to the most recently available data from the National Safety Council. These costs illustrate the financial impact of workplace injuries and the importance of mitigating workers comp risks.

Insurance agents can play a key role in helping their clients prevent injuries, reduce claims, protect the health of their employees and safeguard the financial health of their businesses by educating clients on effective, proactive risk management strategies.

Proactive Measures for Mitigating Risk

Preventative safety measures are key to mitigating the risk of workers compensation claims. Here are four mitigation tools agents can recommend:

1) Physical abilities testing (PAT). A PAT is a highly individualized test that assesses a candidate's physical ability to safely perform the essential functions of a specific job. PATs evaluate physical abilities such as stamina, strength and flexibility. 

Employers should consider PAT testing in pre-employment screening for jobs that have a history of injury and are physically demanding, such as those that involve lifting and carrying heavy objects or those that require repetitive motions. Using PATs in hiring protocols can help employers significantly lower the frequency and cost of workers comp claims.

2) Mock Occupational Safety Health Administration (OSHA) inspections. A mock OSHA inspection is a simulated on-site audit that can help companies identify potential hazards, improve safety practices and compliance, and provide a safer workplace for employees. These mock audits can uncover lapses in procedures, equipment that might need maintenance and other potential issues.

This proactive risk management practice can help companies improve overall safety to prevent accidents and reduce exposure.

3) Department of Transportation (DOT) training. Clients with transportation fleets should implement DOT training. Designed to improve driver compliance, this risk mitigation strategy is critical to protecting the financial health of businesses. The average crash costs an employer $16,500, according to data from OSHA. This rises to $74,000 when a worker has an on-the-job crash that results in an injury—and can exceed $500,000 when a fatality is involved.

4) Ergonomic equipment and policies. Agents should also advise clients to focus on preventing ergonomic workplace injuries, a common injury across all sectors. Agents can recommend that clients consider setting up job rotations every two to four hours to eliminate repetitive motion and physical strain and design workstations to eliminate bending, reaching and twisting. Workers comp clients should also offer ergonomic equipment such as keyboards and mouse pads to prevent carpal tunnel syndrome and chairs with strong back support to prevent back pain.

Post-Claim Risk Mitigation

Even with robust risk mitigation practices in place, workplace injuries can still happen. When these occur, agents function as trusted advisors for their clients, helping them navigate the sometimes complicated claims process.

A key part of the mitigation process is helping clients understand the importance of communication with an injured employee. Communicating regularly with injured workers shows concern for their injuries and recovery. Regularly engaging with an injured employee to offer support increases the likelihood that the employee will return to work and helps avoid litigation.

“While injured workers need encouragement and nurturing, the employers' reaction—or lack of action—often aggravates the situation," according to the Society for Human Resource Management (SHRM). “Harboring feelings that injured employees are the 'villains,' the employer often focuses on resolving the resulting production issues and has little or no contact with them. The injured workers sense of self-worth and identity spirals downward, while animosity and distrust build. Litigation begins to look like the only alternative."

Additionally, agents should stress to their clients that employees must be cleared by a doctor before returning to work. Once the injured employee is medically cleared, employers would be wise to implement a return-to-work (RTW) program designed to help injured employees safely get back to work. These programs can include part-time work hours, light-duty work options or different job duties to prevent reaggravation of an injury and to help make the transition back to work safer for the employee.

RTW programs can lower the cost of a workers comp claim by shortening the duration of the claim resolution and reducing the amount of workers comp indemnity payments. RTW programs can also help employers improve their workers comp claims history, lowering their experience modification factors (EMFs), which can reduce the cost of workers comp premiums.

Jeffrey Breskin is a commercial lines producer at the Insurance Office of America. He can be reached at 323-318-8810.