Business Insurance

Developing and Maintaining an Effective Safety Culture

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Focusing efforts on developing and maintaining an effective safety culture can help reduce workplace injuries and accidents and ultimately reduce your workers compensation premium. Here are a few key things you can do to improve your safety culture:

Establish a written safety program. Your safety program should include training on preventing workplace accidents and injuries as well as incentives for maintaining an accident-free environment. Getting commitment from management and employees is key.

Be selective in your hiring process. Choose new hires who share the same safety culture values. Provide accurate job descriptions to job applicants, obtain previous work references, and conduct criminal background checks. Also, conduct a pre-start post-offer drug test and obtain a motor vehicle report (MVR) for new hires.

Reduce human error. Ensure employees know the correct methods and procedures to accomplish their assigned tasks. Require employees to demonstrate skill proficiency before performing a particular task.

Prevent accident recurrences. Investigate and document every injury and near-miss. Identifying why and how the accident occurred and making proper corrections can help prevent future incidents.


There are several factors taken into consideration when calculating a workers compensation premium. It is a good idea to review these items with your insurance agent to ensure you aren’t paying more than you should for workers compensation. The following is a summary of some of the factors used in calculating these premiums and what you can do to ensure your premium is accurate.

Classification Codes

Employers are assigned classification codes based on their industry, and different codes are assigned to employees based on the type of labor in which they engage. These class codes are set by the National Council on Compensation Insurance (NCCI), and they are state specific.

You can affect the amount of premium you pay by conducting an audit of your employee classification codes on an annual basis to ensure accuracy. This can be done by reviewing current employee classification codes and identifying any employees who are not correctly classified. For example, if you have an employee who has moved from a job on the factory floor to the office, this employee may be assigned a less costly classification code to reflect the change in their work responsibilities to a job with less risk of injury. If you need to review a specific class code or request information from the NCCI Scopes Manual, you can call NCCI at 800-NCCI-123, or ask your insurance agent.


The premium you pay for workers compensation insurance is generally based on the size of your payroll. If you have downsized your workforce and decreased the size of your payroll recently, these changes need to be communicated to your insurance agent. Making this simple update to your workers compensation records may have a significant effect on the amount of premium you pay going forward.

Claims Experience

The severity, type, and frequency of workers compensation claims you incur has a significant effect on your workers compensation premium. The more severe the claim and the more claims you incur, the higher your premium will be.

You can make a significant impact on your workers compensation premium over time by developing and maintaining a safety culture geared towards preventing accidents and injuries. In addition, regularly review your loss history and look for open claims that have been resolved but never closed. These outstanding claims can add unnecessary costs to your workers compensation premium.

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