Recently, Electrical Construction & Maintenance (EC&M) published an article about workers' compensation and the increased exposure electricians face. Over a ten-year study that analyzed 26,000 claims of construction-related injuries, AmTrust Financial Services found that electricians accounted for nearly 20% of claims. They also discovered that Arizona claims were 42% higher than the national average.
AmTrust knows what they are talking about. They are in the top 5 largest workers’ compensation carriers in Arizona by volume according to NAIC. While falls from height (31%) and sprains (27%) were the two severity claim drivers, falls from height and lifting injuries were the most frequent loss drivers in their study.
Additionally, AmTrust found that employee tenure was a significant factor in claim development. The two most vulnerable employee groups were new employees with less than 1 year (33%) and employees with 6+ years of tenure (29%).
How can this study help proactive electrical firms operate more efficiently and save money? Workers’ compensation claims cause financial stress on organizations by increasing insurance costs, hijacking project timelines, lowering morale, and even causing reputational harm. Business owners can safeguard their company from self-inflicted and easily preventable harm by understanding the behavior that leads to financial leakage within their firms. Here are three suggestions to consider:
1. Prioritize your annual safety goals. While there are hundreds of different safety topics you could discuss during toolbox talks and monthly safety meetings, you will make a significant impact by focusing on the top severity and frequency loss drivers your industry faces: falls from height, sprains, and lifting injuries.
Don’t feel intimidated by not being a risk management expert. Your insurance agent and workers’ compensation carrier should be able to steer you toward resources and tailor a safety program specific to your organization’s needs.
2. Provide extra support for vulnerable employee groups. Every employee benefits from regular safety training but some groups require extra attention. If you haven’t designed a new employee orientation or it is informal at best, that is a good place to start. A good NEO will uncover weaknesses and strengths in the new employee’s skillset and reinforce your positive, proactive safety culture.
As employees progress from journeyman to master electrician, the likelihood they will experience a frequency of injuries decreases as they gain experience.
Alternatively, tenured employees with 6+ years can benefit from an extra layer of support because their bodies are more at risk from wear and tear. When master electricians get injured, AmTrust found that claims were more severe because their bodies don’t bounce back so easily.
3. New in Business operations have increased exposure. In AmTrust’s study, specialty contractors in business less than four years accounted for 75% of all claims. They acknowledge it is difficult to always juggle safety above making a profit or providing customer service. But the benefit for firms that do is lower insurance costs, consistently meeting deadlines, and outperforming competitors who cut corners and destroy their reputations in the long run.
If your company has been in business for less than 4 years, you will benefit from working with an insurance agency like Wilson Insurance which will invest the time to help you develop and implement a winning safety culture. The right program will balance safety objectives with production requirements. If your agent is only marketing your account every three years (if ever) for you, you are overpaying for their service.
While electricians in Arizona face above-average risks than other artisan contractor niches, it is possible to manage them with the right support. Businesses with winning safety cultures have lower direct and indirect costs which they can leverage to outperform competitors. I invite you to let Wilson Insurance complete a safety and coverage review for your company. We can illustrate weaknesses and strengths in your risk management plan and show you ways you can lower costs and increase safety performance.
You can reach out to me at justin@wilsoninsuranceaz.com or at our office in Mesa, Arizona at 480-964-2400.
Justin Chappell
VP Business Development
Wilson Insurance
Justin has been helping business owners improve their safety results and lower their costs for almost 20 years. He developed a passion for workers' compensation issues as a senior underwriter at CopperPoint Insurance where he managed a $34 million book of complex business. When he isn’t blogging or building his book of business, he can be found watching his son play 16U baseball and enjoying the outdoors.