By Eric Lowe and James Jesser
Every day, more than 240 agricultural workers suffer a serious lost-work-time injury. When the injured employee is a family member, the farm can decide how to manage treatment. When the agricultural worker is an employee, the injury becomes a workers’ compensation claim.
As farms and connected agribusinesses grow bigger to meet rising food demands, their workers’ compensation claims grow as well. Because farm work is manual and agricultural workers work with both machinery as well as with animals, the risk and liability is high.
This leaves agribusinesses – especially those that were previously small or family-owned – suddenly struggling with runaway workers’ comp costs and significant losses in productivity, employee absenteeism and extended leave.
And it takes a toll on the balance sheet. For example, workers’ compensation costs are as high as $8 to $10 per $100 of payroll for California’s 1,750 dairy farms that lead the nation’s annual milk production. Compare that to the state’s average workers’ compensation rate of $3 to $4 per $100 of payroll. High loss ratios will lead to more claims, an elevated experience modification factor and therefore, higher workers’ compensation premiums.
Minimizing Workers’ Compensation Costs
Growing agribusinesses will want to minimize their workers’ comp costs through loss control and claims management.
Proactively controlling losses is the number one way any business can reduce its workers’ compensation claims. Here’s how to do it:
- Look at your existing losses. Take the time to really go through the numbers and find out what’s causing the losses. Analyze any trends you see.
- Inspect equipment. Do walk-throughs on a regular basis to evaluate hazards in the workspace. Does your equipment have the right safety guarding? Is the tractor’s power take off in place and functional?
- Do a hazard assessment. Take a good look at your equipment and your workspace. Try to meet the current industry safety standards, rather than what you’ve always done.
- Institute a formal training program. Make sure agricultural workers have been trained on how to do their jobs, including how to use equipment correctly. They also should be evaluated to ensure they can meet the physical requirements of the job. Consider formal equipment training for all staff, even those who have worked with you for years.
- Build an ongoing safety program. Do you require your agricultural workers to wear seatbelts while operating farm vehicles, or goggles while milking cows? Has your staff been properly trained to operate all the machinery they use?\
- Keep the environment clean and sanitary. It is possible to maintain a clean and sanitary environment – even on a farm. Expectations set by owners and enforced by supervisors should be met by all employees.
- Consider bilingual and literacy needs in safety training and programming. Agricultural workers can have varying levels of literacy and multiple languages may be spoken. Consider using images or live demonstrations in safety training to show how to safely and correctly execute a job task.
Manage claims appropriately
Managing existing and future claims appropriately is also key to minimizing workers’ compensation costs. Brokers and insurance carriers have claims management departments that can assist your agribusiness in this task but there can be wide variances in the services they provide. Ask your broker how they can help you investigate claims, move them along and promote resolution. Consider the following to improve claims management:
- Report claims on time. Even a minor injury needs to be reported to your carrier immediately, as claims are normally accepted or denied within a few weeks from the date of injury. If you miss this window, your policy may not cover the injury.
- Establish an early return to work program. Creating an early return to work program for your injured employees can help get them back on their feet more quickly, minimize malingering and keep your relationship with the employee strong.
- Procure the right insurance. Consider more than just cost when choosing your broker and carrier. Look to partner with those that specialize in writing agribusiness policies. Understanding your business is critical to managing its unique claims.
- Develop a relationship. If your agribusiness is large enough to have claims losses, develop a relationship with your broker and carrier’s claims department. Ideally, they’ll assign a specific claims examiner to work on all of your claims.
Contact your HUB broker and claims management specialist today to learn how you can minimize workers’ comp claims and losses and maximize claims management.