Strict Policies Mean Big Cuts in Workers' Comp Premiums

Find out how a company in Utah cut its workers' compensation premiums by 50 percent.

Want to reduce your workers' compensation premiums by 50 percent? Try an approach similar to L.K.L. Associates Inc. of Orem, Utah, which cut its comp premiums in half by communicating written safety and substance abuse policies to workers, then strictly enforcing those policies.

L.K.L. has cut its comp costs even though it tripled its payroll in the past five years. "We have seen a dramatic decline in our premium costs," said John Sundwall, the company's general manager. "Education and open communication between co-workers are important factors leading to our lower workers' compensation costs."

At L.K.L., which supplies drywall and steel framing materials for contractors and consumers, employees are encouraged to discuss safety concerns with supervisors and at company safety meetings. "Our employees are continuously reminded to be safe while on the job," Sundwall said. "Next to the driveway entrance of our building is a demolished truck, which was in an accident years ago and is on display as a constant reminder."

An effort to hire and train safe employees also has made a difference at L.K.L. Sundwall considers his co-workers part of a family, where employees watch out for one another. "Workplace accidents not only seriously affect people's lives but can devastate a company financially," he said.

Sundwall works closely with L.K.L.'s insurer, the Workers Compensation Fund (WCF) of Utah, through annual safety audits and by bringing in WCF safety representatives biannually to speak on industry-related topics.

WCF has found that, when an employer implements a drug and alcohol testing program, workplace accidents decrease up to 50 percent. Taking steps similar to what L.K.L. has done helped Utah become the fifth lowest state for workers' compensation costs, said Lane Summerhays, WCF president and chief executive officer. "The costs associated with creating a safe workplace are minor compared to the costs of not having one," Summerhays said.

WCF offers tips to help keep employees safe and workers' comp premium costs to a minimum:

  • Have a formal, written safety policy that is communicated to each employee;
  • Implement a drug and alcohol testing program;
  • Provide safety training to each employee and participate in safety seminars;
  • Investigate all accidents to determine cause and make necessary changes to prevent any reoccurrence;
  • Report all accidents within 24 hours to your workers' compensation provider;
  • Implement an early return-to-work program using "light duty" assignments;
  • Work with safety professionals in accident prevention;
  • Encourage a safe work environment at every level, from top management down;
  • Review safety training annually;
  • Inspect all equipment for safety prior to use.

To learn more about how safety remains a key reason to keep up the fight against workplace drug and alcohol abuse, read "Just Say Yes to Preventing Substance Abuse" in the upcoming April issue of Occupational Hazards. If you do not receive the magazine, click on the "Subscription" button on the left-hand side of this screen.

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