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How your operations impact Workers’ Compensation insurance premiums

Insurance companies charge an amount of money for each policy, called the premium, which is based on a set of rating factors that take into account your business operations, the industry and prior claims history. 

In this blog post, we will explore how these affect your insurance premiums and what steps you can take to reduce the risk factors. Most state workers’ compensation systems are underfunded, so premiums are expected to increase over the coming years, especially for businesses with claims and worker injuries. 

Firstly, all industries have risks; for example, construction, logging, and mining are physically demanding and have a higher likelihood of machinery-related personal injury claims or exposure to dust, while warehousing and logistics have a higher incidence of back and arm injuries. 

Although office-based occupations may have a low personal injury risk, there is an increased risk of mental health issues leading to anxiety or depression. These types of physiological injuries can also have long terms affects, not only physical-related injuries.

Therefore, managing your operational environment and ensuring your employee well-being is key to reducing or potentially eliminating the risk of injury and workers’ compensation claims.

There are very good (free) guides to risk management online, including SafeWork NSW Workplace or When to use risk management.

It’s been proven that a business with a high level of risk management will have fewer claims involving employees and visitors. Therefore, directly reducing both the length of the time away from work and size of the claim and also premium. 

Employers with a poor safety record or inadequate risk management will likely have higher insurance premiums than those who prioritise safety and invest in risk management. 

Ultimately, working conditions can have a significant impact on your insurance premiums. 

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Insurance Advisernet, ABN 15 003 886 687, AFSL 240549

This article originally appeared on Insurance Advisernet News and has been published here with permission.

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