Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.
How do you differentiate your company from your local competitors? Product, customer service, delivery, etc. The same can be said for your risk profile and insurance costs. Why are my insurance rates high when my competitors are low? Here are four factors that influence your risk profile and impact pricing:
FREQUENCY OF CLAIMS
The frequency is the number of workers’ compensation claims you average.
Calculation – # of claims / basis
Evaluate – How often are you having workers’ compensation claims and how does that compare to other landscape companies in your region or state? If frequency is high, a line can be drawn to conclude that your high frequency will lead to more lost time or severe injuries.
Action – If you are having a frequency issue, you need to assess:
Injury Type (back, hand, wrist, knee…)
Root Cause (lifting, punctures, slips…)
Implement corrective actions to help mitigate the risks associated with your claims.
Take it to the next level and evaluate “near misses.” Treat a “near miss” as if it were a claim and strategize a corrective action to prevent it from happening in the future.
Use our Risk Management Center to assign a training to the foremen or supervisor and injured employee to help prevent this from occurring in the future.
Indemnity (Lost Time) Claims
Indemnity is the number of lost time claims your company experiences.
Calculation – # of lost time claims / basis
Evaluate – How often are you having indemnity claims that result in lost time and how does that compare to other landscape companies in your region or State?
Action – If you are having an Indemnity issue, you need to assess:
Injury Type (back, hand, wrist, knee…)
Root Cause (lifting, punctures, slips…)
Implement corrective actions to help mitigate the risks associated with your claims.
Establish a “return-to-work” program which allows your injured employees an opportunity to come back to work on limited duty.Improve accident investigation, documentation, and claim reporting protocols to equal best practices.
Experience Rating
Your experience rating is a combination of your loss data and total payroll when compared to your industry typically over a three year period. Your experience rating will either credit or debit your workers’ compensation premium accordingly.
Calculation – Project your Experience Modification (XMOD) 6 months early at your Unit Stat filing.
Evaluate – Determine the impact changes in your Expected Loss Rate (ELR) and Primary Threshold will have on your next XMOD.
Action – Controlling your frequency of claims and number of indemnity claims will lower your Experience Modification.
Operations
Heavier operations would include hardscape construction, tree trimming, and snow removal in which generally heavier machinery and product is used, thus a higher exposure to injury. Compare these types of landscape operations to a lighter exposure such as landscape maintenance, mowing, edging and pruning.
Calculation – Determine the percentages of your operations that fall into the various landscape work areas.
Evaluate – Identify the exposures that are unique to each area of your operations.
Action – Implement safety programs catered to your exposures that will mitigate risk and help protect your employees. Although your operations might be heavier, you have the ability to implement tactics to reduce or prevent the claims from happening, thereby subjectively and objectively making your risk profile more appealing.
We have seen 100% landscape construction firms achieve industry low experience XMODs and the markets most aggressive rates. Don’t wait for the injury to occur; be proactive and stop the claim before it transpires.
Your risk profile has already been created whether you know it or not. The opportunity for you to own it and improve it is always available.
With one click of the mouse, you can see how you stack up against your competitors through our Key Performance Indicator (KPI) dashboard, today.
Contact me to get a customized KPI dashboard at (619) 937-0200 or drewgarcia@ranchomesa.com.