Lower Your Premiums by Increasing Your Safety

Everyone knows they should have a safety program. It simply makes good business sense. It will save you money by reducing the number of injuries on the job, because employees are aware of safety issues and will be careful.

In addition, if you communicate your safety initiatives to the right people, you can save time and money.

In theory, it's a great idea to plan weekly safety meetings for employees, but in reality, it's hard to keep up with the topics and preparation, and it's even more difficult to count on consistent and timely attendance from employees.

Think about meeting less frequently for a longer period of time — say, quarterly for 60 minutes. And don't go over that time limit — end the meeting exactly on time. This way, it's a single day, everything is combined into a single

session and it's less disruptive to your workforce. Another reason safety programs are difficult to implement is because you have your own job in the company. Safety programs probably aren't listed in the job description. Nor are they listed in the office manager's description, which is the next place they seem to fall.

Everyone has a full plate already, and to add something else to it sets the stage for failure. So, who takes responsibility? Try relying on your vendors for safety training. It can be someone who sells you products or accessories (i.e. your ladder vendor) or your insurance agent.

Lower Your Losses

One major reason insurance premiums are high is because of previous losses. Businesses that have a strong safety culture in place have fewer losses. By communicating these preventive measures, your business can save on insurance premiums.

A good insurance agent can help clients save by offering industry-specific safety programs that meet their business needs. That agent then can get you insurance credits for your safety program.

Your general liability insurance is based on five key factors:

1. The industry in which you do business
2. The size of your business
3. The insurance marketplace
4. Past claims history
5. Safety programs

You'll easily help number four if you do number five. Executing a strong safety program doesn't have to be overwhelming. But, it does need to be repetitive and consistent, and it can be turn-key.

Once the program is set up and running, be sure you get credit for it. You almost want to emulate George Costanza on the infamous Seinfeld episode, "The Calzone," by sticking your hand back in the tip jar for a minute.

The audience roared with laughter as George manages to tip the man who made his calzone just as he turns away and doesn't see the tipping happen. Of course, George tries to retrieve his tip and gets caught. A hilarious exchange ensues, but the moral of the story is that George wanted — and deserved — credit for his good deed.

So do you, but you can get it in the form of actual savings on property, liability, auto or workers compensation premiums.

Steve Moon of Moon Services Heating and Air Conditioning in Elkton, Md. admitted he thought it simply made good business sense to take his trucks off the road for eight days of bad weather this past winter. "I'd rather have zero sales for a day than have an injured employee or a vehicle in an accident," he says.

Indeed, this made good business sense. What made even better sense was to list it as a safety program and get a credit on the business liability insurance.

Moon Services already runs a comprehensive safety program that includes thoroughly training the technicians in everything from how to place a ladder to recognizing heat stroke. Moon relies on his insurance agency to send text messages to communicate reminders such as keeping hydrated in the summer months.

"Our employees work in attics in the summer months where it can be 140F or higher," he says. "It's important that they immediately recognize the signs of heat stroke."

All of this helped Moon Services keep its insurance premiums low because his insurance agent shared the good deeds with the right people at the insurance carriers.

Sherry Crow of Smith & Rawlings in Annapolis, Md. took the message her insurance agent provided her a step further and had her employees sign an agreement that they would not park company vehicles under trees during winter months, in an effort to prevent damaging ice from falling onto a vehicle.

She had fewer claims for ice damage last year than any other year. By communicating this, she received a significant credit on her liability insurance and maintained a low claim rate.

Implement a Safety Program

If you're unsure where to start for a safety program that can have an impact on your insurance premiums, ask your insurance agent. Programs can be simple and low-cost, or they can be a company investment that results in multiple benefits.

For Hayden Mechanical Services in Finksburg, Md., installing GPS devices in every service vehicle was well worth the investment. The system helps with directions and can pinpoint the vehicle's location, but the driving speed can also be monitored for safety.

The company's coordinator communicates by pager to the technicians to alert them of traffic disturbances or accidents, saving valuable time. In addition, Hayden Mechanical Services relies on their insurance agent to hold quarterly safety meetings to emphasize safety on the job — from safety 101 class to driving improvement training.

By communicating all of these programs to potential insurance carriers, Hayden Mechanical Services experienced reduced insurance premiums along with the efficiency of the GPS devices.

Your safety program should consist of three phases.

First, determine how much your safety (or lack thereof) is costing your bottom line. Your insurance agent should be able to assist you, then, create a plan to align your employees' goals with your safety goals.

A safety incentive is one of the most effective ways to motivate employees to be safer, but be sure to review OSHA's 2012 memo, "Employer Safety Incentive and Disincentive Policies and Practices," before finalizing your safety incentive program.

Next, hold an initial company-wide meeting to distribute your company's safety mission statement and safety incentive program. Your employees should feel part of the culture and commit to it in writing, by signing the safety mission statement.

Explain your new safety incentive program. If your insurance agent is helping you with the safety program, this is a great opportunity to let him or her present the program. It also gives you a way to be held accountable for the program, and when it comes from an outside party, the message is effective.

Finally, schedule additional one-hour safety meetings for each of the next three quarters. Get them on the calendar now, or else one year will go by and nothing will have happened. If you're not sure what topics to cover, make the next safety meeting about driver safety, the second about ladder safety and the third about electrical safety.

Use your insurance carrier to administer the driver seminar, ask your ladder supplier to help with the ladder safety seminar and ask a distributor for assistance in a presentation on electrical safety.

Following these presentations, you should see injuries and claims decline, while savings increase.

Unlike George, you can get credit for the good you do. Work with the right people and keep the program simple. A good insurance agent should be asking you the right questions to learn everything about your business and provide support where possible.

A simple e-mail or text from your agent about the dangers of parking under ice-laden trees reminds clients to communicate to their teams. If you don't have the time or inclination to do the communication, then hire someone to do it for you or enlist your insurance agent.

There are many great safety ideas waiting to happen that will show a direct return on your investment. It's an easy way to turn safe into savings.

Matthew Stangle is a managing partner at Insurance Force and a member of the Heating & Air Conditioning Contractors Association of Maryland. Matthew teaches safety classes for new HVAC employees. Insurance Force provides business insurance such as liability and workers' compensation, as well as employee benefits such as group health. Visit www.HVACinsurance.net for additional information.