A construction company’s Experience Modification Rate (EMR) is not the final word on the kind of safety environment you foster, but it is an important indicator. It makes developing a comprehensive safety strategy that addresses the factors driving your EMR one of the most important projects you can undertake.
This numeric representation of your claims history and safety record is an underwriting guide for your workers’ compensation insurance premium. The rate is calculated based on claims data from three years prior to the current year. The average is 1.0. Coming in higher signifies a greater risk standing (and higher premiums), while coming in lower shows you’re safer than the average business in your specialty.
Every construction firm should have a risk management program that anticipates all possible losses – like property and equipment thefts – but employee safety is in a category by itself as the cause of the most frequent and expensive losses.
A focused strategy will not only promote worker safety but also push your EMR down over time. Not only will your workers’ compensation premiums reflect it, but your safety standing will put you in a better competitive position to win new contracts and recruit workers. Everyone wins.
Your strategy should have several components, but should be grounded in your commitment to construction safety, not merely your interest in complying with government standards.
After all, meeting OSHA regulations is always advisable and helpful for staying in regulators’ good graces. But those are minimum requirements that don’t get to the heart of the risk of your on-the-job activities. Plus, managing to the minimum won’t win the hearts and minds of your workers or prospective clients, much less drive a better EMR.
Facets of a comprehensive safety program
You validate your commitment to construction safety through a comprehensive safety program that’s rooted in specific routines and processes. This covers situational preplanning, hazard identification processes and regular risk assessments, all formally spelled out, and communicated and revisited regularly with workers and job site managers.
An accountability system for controlling hazards is also critical. Performance goals and metrics for evaluating progress need to be established and tracked, and applied down to the project and supervisor level. The system must be constantly evolving, and incorporated into employee safety training and education.
Despite your best efforts, of course, workers will experience injuries, which makes it important to also incorporate an effective injury management system in your safety program. This is also important for controlling your EMR with an eye on loss frequency given its value in the EMR calculation.
Various practices can be combined to ensure best results, starting with putting work hardening and formal return-to-work programs in place and ensuring they’re fully utilized. Offering light-duty positions for workers hurt on the job can eliminate indemnity payouts and keep people working. Another helpful measure is to mandate employee wellness initiatives to address issues like weight and smoking that can tie back to workplace injuries.
Address EMR through specific proactive measure
It’s also key to take a proactive posture towards your claims and EMR through your injury management program.
One valuable activity is to conduct “claims closeouts” and do them regularly. It’s an activity to undertake with your insurance broker before EMRs are prepared to review and update your loss reserves, make sure old or open claims are addressed, reserves adjusted lower and even closed out completely. Old claims kept open unnecessarily can artificially inflate your EMR.
Another activity? EMR audits, conducted regularly, are important and should be focused on identifying errors in your EMR’s position on the rate schedule, classifications and clerical mistakes.
Foster a safety culture
Ultimately, your goal is to establish and live a safety culture where employees are not merely trained in your safety systems and processes, they are empowered to live safety day in and day out.
That means field observations conducted daily on the work site are part of the expected routine, and work methods, too, are always being evaluated. You reduce risks of everyday worksite tasks to the lowest level you can. There’s no arguing with how that focus on safety benefits your working environment – one that shows better productivity and employees that are motivated and appreciative of your efforts.
And your EMR? The culture you’ve established will, over time, drive it down, making it a powerful representation of your commitment to workplace safety.
See how you can build a culture of safety for your business that improves your EMR rating and protects workers.
Download “The 6 Safety Metrics You Should Be Tracking”
