Commercial insurance is one of the largest expenses any snow removal business faces. Any way that you can find to save on this expense contributes to the long-term success of your business. Many snow removal business owners shop their policy around to many agencies and some even try to get by on less coverage, but one often overlooked way to save on your insurance premium is to implement a well-documented safety program.
An effective safety program should not take an enormous amount of time away from your business. If executed properly, the safety program can result in your business having less injured workers, lower what your business pays in premiums, reduce the amount and severity of insurance claims, prevent your business insurance prices from increasing when a claim does occur and avoid being dropped from coverage altogether.
Here are four ways a well-documented safety program can benefit your business when it comes to acquiring, using and renewing commercial insurance.
1. Fewer Injured Workers
Having fewer injured workers within your organization is a positive in many ways. First and foremost, happy and healthy workers are productive workers. When a business experiences an injured worker, it is never a good situation to be in. Injured employees have to deal with getting the proper medical care, and have to find new ways to pay their bills while they are hurt and not able to work. The medical bills should be paid for by the business’ workers’ compensation policy, but navigating through this system is never easy. Plus, in addition to the stresses of this worker, all of the other employees need to pick up the slack for the missing employee.
2. Less Severe Claims
When a well-documented safety program is in place, the results of that program are usually fewer accidents. In addition to less accidents occurring, the severity of those accidents have a tendency to be less severe. Keeping those claims less severe can help your relationship with your insurance agency and insurance carrier. This is because less accidents that are less severe overall can positively impact the experience modification rating of your business. This rating is the number one factor insurance carriers use to determine what to charge your business for a workers’ compensation insurance premium.
3. A Better Premium Rate
Documenting your safety program is important. It is especially important when you are buying commercial insurance and when you have claims that cause you to use your insurance policy. If you have a well-documented safety program in place, your insurance agent can use it to negotiate better coverage at a lower price on premium. Insurance carriers like to quote coverage to businesses that are likely not to use the policy. That is fundamentally how an insurance business makes money. If you have a safety program in place and a strong experience modification rating to go along with it, insurance carriers are more eager to dig deep to earn your business.
A safety program can also be used by your insurance agent when your business experiences a year in which you have several claims, or a year in which you have one or a few severe claims. If your business experiences a bad year in relation to insurance claims, your insurance agent can use your safety program as documentation that you are taking the proper steps to prevent this from becoming an ongoing problem. No matter what the reason is for your insurance agent to use your safety program, it almost always contributes to a lower rate on premium.
4. Not Being Dropped by your Carrier
In some instances, if a business has a bad year in terms of claims, it can cause an insurance carrier to consider refusing to offer coverage to the business moving forward. When or if this happens, it can have drastic impacts on your business. In terms of workers’ compensation, if you cannot find coverage on the open market, you are required to purchase coverage from the state provider. This provider is typically more expensive than buying coverage on the open market.
Furthermore, if you are not able to find coverage on the open market and are forced to buy coverage from the state provider, most states require you to purchase coverage from the state fund for a period of two to four years depending upon the state in which you are located. This can cost your business more on workers’ compensation premiums for multiple years. Safety programs, especially when they are documented, can help prevent this from happening to your business.
If you have a well-documented driver safety program in place, your snow removal business is going to have fewer claims, the claims are going to be less severe, the business is going to pay less for insurance premiums and the business is going to be less likely to be dropped from coverage by the insurance carrier. If your business does not have a well-documented safety program in place, here are four reasons why every small business should implement a safety program now and keep it in place for the foreseeable future.
