- Buyer's Guide
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Summary: In this installment, Professional Carwashing & Detailing asked Paul H. Smits, a senior vice president at Carpenter, Cammack & Associates, Inc., to answer a question regarding Workers' Compensation submitted by an anonymous carwash owner.Question: Is there any way to control my Workers' Compensation costs?
Paul H. Smits: Employee injuries can range from something as simple as a cut on a hand to an employee who requires hospitalization after a conveyor roller catches a foot and drags him.
Since Workers' Compensation insurance can be a significant source of expense for many carwashes, it is important that owners realize there are ways to reduce these costs without sacrificing the quality of their insurance coverage.Safety and accident prevention programs
Attendants at your carwash are valuable assets. Getting rid of your employees is not the answer. The answer is to train them. With a good safety and accident-prevention program in place, you can:
- Protect your employees from injuries;
- Reduce your premiums through schedule credits and/or a credit experience modification;
- Prevent your company from having a policy non-renewed; and
- Protect your carwash from liabilities related to workplace injuries.
If your carwash has a formal program in place, strengthen it. If you do not have one, get one. Most insurance carriers can assist you in developing a program.
Preventing losses on your Workers' Compensation equates to savings on your premium. The Workers' Compensation experience modification is either a credit or debit on your premium, based on a three-year calculation of your losses and payrolls.
The most recent 12-month losses are not used since these losses are not fully developed yet. The final percentage is then the result of how your actual losses compare against expected losses in the carwash industry based on the size of your payroll.Safe and secure environment
Employee training is just one factor in creating a safe workplace. It is also important to create a safe and secure work environment.
Scheduling times to conduct regular facility inspections is important to ensure that equipment and machinery are safe for employees.
Most risk management insurance firms can conduct facility inspections and offer suggestions for improving workplace safety, ensuring that businesses comply with all government regulations.
Occupational Safety and Health Administration (OSHA) is starting to look more closely at the carwash industry.
For example, when employees are subject to noise levels at or above 85 decibels (dB) for an eight-hour work day, OSHA regulations require noise monitoring.
The average industrial dryer measures between 75 and 110 dB. Your carwash may need to modify equipment or issue protective earplugs to employees in order to meet OSHA regulations.Safety-oriented policies
Another effective way to reduce Workers' Compensation costs is to establish safety-oriented policies and procedures.
Creating a post-accident drug testing policy is a simple way for a company to reduce its insurance costs without having to invest a large amount of time.
Consult a risk management expert to learn what types of polices and procedures are best to adopt for your carwash business.Professional risk analysis
Have an insurance company with experience in Workers' Compensation policies ask their risk management personnel to perform a current risk analysis of your business.
Studies have shown that businesses that have a professional risk analysis performed experience reductions in frequency and severity of workplace-related injuries, which helps to lower Workers' Compensation costs.
Take a look at your company's history and examine the types of claims filed, combined with the frequency with which those claims occurred.
By combining knowledge of past Workers' Compensation claims with a current risk analysis of the employee work environment, a company can better assess its coverage needs and put a plan of action in place to prevent or reduce future losses.No one size fits all
There is no one-size-fits-all policy for Workers' Compensation, which is why it is important that business owners make an effort to reduce their policy costs.
By taking the time to train employees, inspect facilities, establish new polices, and have a current risk analysis performed, carwash owners can reduce costs and improve the safety of their businesses.
Be sure to contact an insurance specialist who knows the carwash industry. Agencies that focus on the carwash industry are better prepared to handle the exposures you face everyday.
Look for someone who:
- Knows the carwash industry;
- Can assist you in determining what to insure and what not to insure;
- Can explain in simple terms what you are buying;
- Knows the intricacies of how your experience modification is calculated; and
- Has experience in training and education.
With your agent, you should feel you have an expert buyer and trusted advisor looking out for your best interest.
Paul H. Smits, CPCU, CIC, AIM, is a senior vice president with Carpenter, Cammack & Associates, Inc., in Charlotte, NC, an active member in the Southeastern Carwash Association and specializes in insurance for full-service carwashes. Paul can be contacted at firstname.lastname@example.org.