As a business owner or manager, you have enough to worry about without safety incidents impacting your team and what you do. That’s why it is so important to have proper safety procedures and risk management efforts in place – and to train your team on those policies. And while it may be common sense that better safety could lead to improvements for your business’s insurance, there may be more impacts than you realize. Here are some of the important impacts to consider as you develop your strategy.
Risk Management: Reduce Exposure
One of the most immediate benefits of implementing rigorous safety and risk management procedures is the reduction of loss potential. When businesses invest in training their team and ensuring that safety measures are consistently applied, they create a safer work environment. This proactive approach minimizes accidents and incidents, typically reducing the number of business insurance claims. Not to mention, fewer incidents means your team’s efficiency and effectiveness should increase, improving your bottom line.
Improved Employee Satisfaction
Employee satisfaction is another critical impact of robust safety and risk management protocols. Workers who feel safe and valued are more likely to be engaged and productive. High levels of employee satisfaction can lead to lower turnover rates, fewer absences, and a more positive workplace culture. Happy employees are also less likely to file complaints or claims, further reducing insurance costs.
Lower Insurance Premiums
Insurance companies review loss history, analyze risk factors, and – in some cases – review a business’s risk management procedures to determine premiums. Insurance companies view businesses with comprehensive safety and risk management plans as lower-risk, resulting in more favorable rates for their coverage. By demonstrating a commitment to safety, businesses can often negotiate better terms with insurers, thus reducing overall operating costs.
Industry Example: Manufacturing
The manufacturing sector provides a compelling example of how effective safety and risk management can lead to lower insurance costs. Manufacturing companies with clear, written, and team-reviewed safety procedures can significantly reduce the risk of injury and illness.
In fact, the Occupational Safety and Health Administration (OSHA) reports that safety efforts in the industry have led to a significant drop in worker injuries and illnesses—from 10.9 incidents per 100 workers in 1972 to 2.7 per 100 in 2022.1 This dramatic reduction not only lowers the human cost but also translates into substantial savings on insurance premiums.
Spend the Time – See the Results
Investing time, effort, and resources into safety and risk management is not just a regulatory or a compliance issue – it can be a strategic business decision if done correctly. By reducing loss potential, enhancing employee satisfaction, and lowering insurance costs, businesses can create a safer and more financially stable environment.
For small business owners, risk managers, and business managers, the path to lower insurance premiums and a safer workplace lies in proactive safety and risk management. How can you get started on a safety and risk management plan for your business? Check out the tools available from Liberty Mutual’s SafetyNet program at https://business.libertymutual.com/services/risk-control/liberty-mutual-safetynet/
If your business wants to discuss how the safety measures you already have or are implementing can help with your insurance, contact Brandon Patterson on our team at brandon@ownbyinsurance.com to get the support you need today!