SAFETY AS A
PROFIT CENTER
One of our insureds with five locations and over
50 employees talked with us about how implementing
a safety program is increasing business profits.
This insured went from 15 Workers Compensation
claims totaling $253,000 two years ago to just one
claim for $243 this last year. The insured told us that
this decrease in frequency of injury saved at least $4.00
in uninsurable/indirect costs for every dollar paid by
insurance. Uninsurable/indirect business costs saved
included the costs of lost production time, overtime
acquiring replacement workers, learning curve losses of
replacement employees, late orders, loss of customer
goodwill, paperwork, office time, and calls. The
insured is also going to pay less for insurance as the
Workers Compensation Experience Modification drops
dramatically. The Safety Program put in place by this
business has already directly and indirectly saved this
business between $250,000 and $1,000,000.
Many businesses are finding that increasing safety
within operations is not only the right thing to do, it is
the profitable thing to do. Benefits of an effective Safety
Program include:
Reducing injuries and accidents prevents pain,
»
suffering, and financial stress felt by workers, their
families, and the community. A safe workplace
enjoys higher morale, less employee turnover and
absenteeism, and has an easier time getting new
employees.
Since uninsurable/indirect business costs run at
»
least four times the amount of insurable costs, many
unforeseen financial impacts are avoided by the
business who can avoid losses.
Lower injury frequency and claim costs can result in
»
lower Workers Compensation costs.
Employees who avoid injury in the workplace tend to
»
turn in fewer health insurance claims and miss fewer
workdays.
An active Safety Program can limit OSHA’s
»
involvement with your business.
Lower injury and accident costs lower the cost of the
»
product or service your business provides and helps
you produce at lower cost and higher profit than
your competition.
With these factors in mind, American Family Insurance
supports and encourages the starting or enhancing
of your safety efforts. Compare the development of
a Safety Program to the building of a house. First,
build a firm foundation and then build systems to
control various areas within the building. The more
encompassing the systems, the more injuries and
accidents are eliminated automatically by control
measures/systems already in place.
amfam.com
SAFETY CONSULTING
LOWERING RISK, FOCUSED ON THE BOTTOM LINE.
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SAFETY AS A PROFIT CENTER
Steps to the Development of an Effective and
Profit Producing Safety Program include:
1. W
rite down the goals you wish your Safety Program
to achieve. (No accidents after today, fewer lost
workdays, reduced injury frequency, reduction of the
Workers Compensation Experience Modification or
total insurance costs, etc.)
For your reference, specific safety program areas
commonly include:
» Employee Selection and Placement
» Lock/Out – Tag/Out
» Effective Safety Rules
» Fire Prevention
2. Issue and communicate a written Safety Policy
Statement to every employee stating your
commitment to safety.
» Hazard Communication
3. A
ppoint a safety coordinator and hold that person
responsible for safety results. Make safety a
responsibility of all Supervisors and Managers and
include safety performance of their employee groups
in performance appraisals. The more people having
safety responsibilities, the greater the likelihood that
the safety coordinator and the safety process will
add to Company profits and, increase production,
and decrease the number of accidents, injuries, and
amount of property damage.
» Safety Motivation and Promotion
4. Set up a reporting procedure so that the effectiveness
of Safety Programs is communicated back to top
management on a regular basis. Review the results,
give guidance, emphasize and support the entire
program.
Once the above mentioned steps are implemented,
choose specific areas for further safety development.
Choose areas important to you that can produce the
largest cost benefits in the shortest period of time. As
you work on these areas, dollars that have been leaving
your business in the form of uninsurable/indirect costs
will start to accumulate in your bank account instead of
being spent without your knowledge or approval.
» Emergency Preparedness
» Accident Investigation
» Safety Committees
» Employee Return to Work
» Personal Protective Equipment
» Job Site Safety Inspections
» Back Injury Prevention
» Bloodborne Pathogens
» Repetitive Motion Injury Prevention
» Confined Space Entry
» Driver Safety Programs
» Establishing Subcontractor Liability Controls
For more information about American Family’s Safety Consulting Services, visit www.amfam.com
DIS C L A I M E R
The recommendations printed here follow generally accepted safety standards. Compliance with these recommendations does not guarantee that you will be in conformance with any building code,
or federal, state or local regulations regarding safety or fire. Compliance does not ensure the absolute safety of you, your operations or place of business.
amfam.com
SAFETY CONSULTING
LOWERING RISK, FOCUSED ON THE BOTTOM LINE.
American Family Mutual Insurance Company, American Family Insurance Company, 6000 American Parkway, Madison, WI 53783
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