Filed Under:Agent Broker, E&S/Specialty Business

How small businesses can reduce their Workers' Comp risk

Small businesses with few employees can be devastated by workplace injuries. (Photo: iStock)
Small businesses with few employees can be devastated by workplace injuries. (Photo: iStock)

When it comes to running a small business, workplace injuries can have a huge impact on operations.

This is especially true when the injury results in an employee absence. Consider a small business that may employ only three people: That business is losing one-third of its workforce. Of course, the first concern with any accident is the well-being of the employee. While an employee is recovering, however, the work doesn’t stop and customers still need to be served.

The Hartford’s 2015 Small Business Success study found that only 29% of small business owners are concerned about an employee being injured at work. Yet, workplace accidents happen more often than you may think. A five-year analysis of Hartford’s claims data found that there is a 50% chance a small business will experience a claim in the next 10 years.

Most common workplace injuries

Many people think that workplace injuries occur most commonly in industries such as manufacturing or construction. Although construction does top the list of the five costliest claims, workplace accidents can happen anywhere, even in an office environment.

According to Hartford’s claims analysis, the small-business industries with the costliest claims are:

  • Construction: $32,000.
  • Transportation and public utilities: $31,000.
  • Finance, insurance and real estate: $29,000.
  • Wholesale trade: $28,000.
  • Services (hotels or professional services such as legal, health and engineering firms): $27,000/

Another misconception is that back injuries are the most common workplace injury. However, Hartford’s claims research found that 40% of injuries that resulted in an absence occurred to the arms, hands or shoulders, making them collectively the most common injury among small business employees. Rounding out the top three most common small-business Workers’ Comp claims were injuries to the feet, legs and pelvis (27%) and the neck/back (20%).

Related: Here are the top 10 most costly U.S. workplace injuries

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Workers' Comp info graphic

Get an agent involved

The outcome of a claim and how quickly an employee returns to work may depend on the insurance carrier the business owner chooses to partner with. Workers’ Comp insurance is a requirement in most states and, although prices among carriers can be comparable, the policies are not always created equal.

Some insurance companies go beyond offering the standard of replacing lost wages and covering medical costs by offering return-to-work programs with nurses and doctors on staff who get involved as a soon as a claim is filed.

Working with an insurance agent can help small-business owners choose the right insurance partner and understand the coverage they’re actually buying, which can ensure that they’re better prepared when an injury does occur.

Tips to creating a safer work environment

Small-business owners can also take steps to help prevent accidents. Here are some basic tips for creating a safer workplace:

  • Conduct regular safety audits to identify and eliminate hazardous conditions.
  • Keep the floor clear of any materials that could cause a worker to trip.
  • Provide employees with adequate personal protective equipment.
  • Properly train all employees and train often; newer employees are the most vulnerable to an accident, and seasoned employees can always use a refresher course.
  • Maintain clear open spaces around equipment and materials being handled or lifted. Easy access allows workers to get closer and reduces reaching, bending and twisting.

With a 50/50 chance of a Workers’ Comp claim happening over the next decade, it is important for small-business owners to prepare their businesses by putting safety measures in place. Owners should also seek advice from an agent to make sure they have the right coverage to help get injured employees back on their feet and back to work quickly following an accident so that the business can continue to operate successfully.

John Kinney is the chief claim officer at Connecticut-based insurance and financial services company Hartford Financial Services Group.

Related: 10 Workers’ Compensation issues to watch in 2016

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