How Ergonomics and Insurance Design Lower WC Premiums

By: CRAIG HALPERN, ARM, CPE, CSP: IMA, Inc.

Workers’ Compensation (WC) Insurance rates, especially in the beverage distribution industry, continue to increase with shoulder injuries replacing back injuries as some of the most frequent and expensive. Without progressive strategies to prevent injuries at the source, operating expenses such as medical costs, lost wages, and turnover can increase WC premiums and slowly eat away at per case margins.

Some of the more progressive beverage distributors, are leveraging not only preemployment screening, onsite medical, and work hardening, but are now moving upstream to look at design of equipment and work methods as a way to prevent injuries and turn safety and insurance into profit centers.

One metric many of the most progressive distributors are starting to follow is total cost of WC claims for drivers and delivery personnel divided by per hundred of payroll. If that metric is moving above $2.00, then increased WC premiums are on the horizon. Applying training and work redesign, bolstered by visual accountability, can often drive down these costs and position distributors to take on larger deductibles to reduce insurance costs and enhance profitability.

Further successful performance can lead to qualifying for captives whereby a distributor acts as its own insurance company and retain the unused premiums when WC claims are avoided.

IMA and Ergo-ology have partnered to bring this successful formula of Insurance acumen and Ergonomics knowledge to beverage distributors who are unsatisfied with their existing performance and tired of seeing margins erode. In the case study presented here, Ergo-ology deployed a Material Handling Bootcamp, followed up by enhanced safety accountability from the distributor, yielding a 17% reduction in Workers’ Compensation Rate and a 31% reduction in WC claims.

By sharing your WC claims data, IMA can run proformas to cost justify an engagement with Ergo-ology and help determine at what level of performance WC premiums start to trend lower. As WC carriers start to compete for your business, IMA guides you toward unique WC program designs that yield dividends, and we prepare you to enter the pinnacle of risk financing, captives.

If you would like to quantify potential ROI for your
distribution operation, please let us know. By sharing your WC claims data, IMA can run proformas to cost justify an engagement with Ergo-ology and help determine at what level of performance WC premiums start to trend lower, WC carriers start to compete for your business. Ergo-ology can make an immediate impact, and IMA comes alongside to guide you toward unique WC program designs that yield dividends, as we prepare you to enter the pinnacle of risk financing, namely captives.