Workers Compensation Premiums Are An Investment
Workers Compensation premiums of any type are almost always viewed as an expense. I actually changed my career path due to the question in the title. Workers Compensation premiums should be viewed as an investment, whether a company pays premiums or is self-insured.
Mark Walls, who runs the Work Comp Analysis Group on LinkedIn recently wrote an article on the upcoming Workers Compensation changes in 2013. One of the passages in the article reads as:
If you get the time, the Work Comp Analysis group in LinkedIn is worth following on a weekly or daily basis.
I do hope that more companies will view Workers Compensation as an investment. The old “a penny saved is a penny earned” would be very applicable.
The return on investment (ROI) is that saving Workers Comp premium allows an employer to reinvest those funds directly back in their budget.
That is one of my reasons for changing my insurance education from a CPCU to a ChFC track. The ChFC curriculum allowed me to analyze insurance as an investment. Workers comp premiums that are treated as expenses get rolled into one expense category such as insurance program expense. Once employers begin treating premiums of any type as an investment rather than an expense, the justification for WC risk management techniques become much more valuable.
Once an employer sees workers comp premium as investments with the insurance carrier, safety programs then become a justified investment to make to save a company’s budget.
Employers that wish to reduce their future liabilities are willing to pay sums at the front-end of claims to avoid the “claims snowball rolling down the hill.” Loading up the risk management techniques at the start of a claim will always pay off in the long run by saving on workers compensation premiums.
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