Magazine article Occupational Hazards

Support Key to Safety Programs

Magazine article Occupational Hazards

Support Key to Safety Programs

Article excerpt

Even the strongest safety program will not help reduce workers' compensation costs if management and employees don't support the program, according to a panel of workers' comp experts.

Also important to controlling costs is early intervention in a claim, meaning employers need to encourage their sites to report claims promptly, the panel said at a session during the Risk & Insurance Management Society's annual conference and exhibition held in May in San Francisco.

"Lost time is the most controllable expense that risk managers can have an impact on," said Stephen N. Raimondi, director of risk management services for Norwalk, Conn.-based ABB Business Services Inc. ABB Business Services has built a nuclear power plant in South Korea and offshore oil drilling rigs worldwide, among other things.

"Having a good written program on the shelf won't necessarily result in good loss control," according to Thomas B. Pomije, regional sales and marketing manager for NATLSCO, a unit of Long Grove, I11.-based Kemper Insurance. "Implementation is the key."

Pomije said it is important to understand a program's benefits in safety and financial terms. That involves spelling out the cost of injuries as well as potential savings in preventing them and better managing claims that occur.

"If you don't sell [the facility manager] on the financial benefit, you probably won't get a real commitment from them," Pomije said.

Raimondi offered as an example a Missouri plant owned by ABB Business Services. According to Raimondi, the plant had no workers' comp problem until its business increased significantly in 1995. At that point, workers' comp costs multiplied tenfold to $1 million, the plant's incident rate shot up 200 percent in one year, and its lost-time ratio jumped 200 percent to 300 percent over a couple of years.

The problem was traced to a plant manager who did not realize that the unit -- not the parent company -- paid the workers' comp costs. Another concern was that the plant did not have a program addressing safety beyond ensuring compliance with government rules.

Raimondi explained to the plant's senior managers how large workers' comp costs were hurting efforts to meet a profit-margin target and how that could affect their careers at the company. He also involved human resources and the safety department and made sure "everyone in the plant knew they had $1 million of costs that was dragging them down. …

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