How to Reduce Your HVAC Workers’ Comp Insurance Costs

Your ExMod: A major factor in HVAC Workers’ Comp Insurance Costs

Before we discuss how to save money on your HVAC workers’ comp insurance, it’s important to know why your costs might be higher than you like. 

First, there’s the industry itself. HVAC work is inherently dangerous, and that’s reflected in a higher rate for workers’ comp insurance than a sales or clerical business might incur. 

Second, there’s your ExMod, which is short for experience modifier. This is a numerical summary of your past claims history.

The more claims you’ve filed, the higher the number will be. The fewer claims you’ve filed, the lower your ExMod number will be. 

HVAC businesses with the fewest past claims will get lower rates because they’re statistically less likely to file claims in the future.

If you’re currently paying high rates for HVAC workers’ comp insurance, reducing your ExMod is the surest way to save.

But how do you do that? While you can’t just erase your score, there are things you can do to change the situations that led to having a high ExMod in the first place.

Create a Written Safety Program

Safety is a critical consideration for HVAC companies. You want to protect your workers, as well as equipment, client property, and more. One way that you can do that and reduce your workers’ comp costs is to implement a written safety program.

But how do you do that? It starts with familiarizing yourself with OSHA guidelines for HVAC workers (which should be posted in your business somewhere). 

You should also do some research to learn more about the most common risks HVAC workers face, such as exposure to extreme temperatures, exposure to hazardous substances, injury from lifting heavy equipment, falls from ladders, and injuries from working with moving parts.

Next, create a safety program that outlines these risks and provides important tips for awareness, prevention, and avoidance, along with correlations to safety gear that can help mitigate threats. 

All relevant employees should be trained in this safety material annually, and the information should be provided t them for reference at any time. Keep a record when each employee took the training each year.

Next, make sure to tell your insurance agent about the safety program. Many insurance companies offer a slight discount if you have such a program because you are less likely to have injuries on the job.

PPE: Enforce the rule about wearing protective gear

HVAC workers are exposed to chemicals, dangerous materials, and other threats each day on the job. 

The best way to protect them and reduce your HVAC workers’ comp costs, is to make sure they have proper personal protective equipment (PPE) and make it mandatory to be worn at every job site. 

What sort of PPE should HVAC workers wear? 

It will vary from job to job, but some of the most common safety gear includes:

• Safety glasses and/or face shields
• Welding helmets depending on the task
• Face masks
• Gloves
• Hearing protection
• Protective clothing (aprons, coveralls, etc.)

Wearing PPE reduces the chances that a worker will be injured on the job and lessens the severity of the injuries. If you make this a priority in your company, it will definitely help you reduce your workers’ comp costs over time. 

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Check your Worker Classification Codes

One of the most common reasons for a business to overpay on their workers’ compensation insurance costs is misclassified workers. Incorrect worker classifications can cost your business a great deal of money. 

Regularly evaluating HVAC class codes and ensuring that all new hires are classified correctly from the start will help you save money.

It’s all based on job duties and the risks inherent in those job duties. For example, a technician responsible for recharging residential HVAC systems (Code 5537) would have a much higher level of risk than a receptionist (Code 8810) tasked with answering phones, booking appointments, and the like. 

If you have low-risk workers classified with higher-risk job codes, you’re paying more for your workers’ compensation coverage than you should.

While it’s easier to lump all the workers into one code, taking the time to separate them into the right HVAC class codes can lower your premium costs instantly.

Create a Return-to-Work Program

What happens when an employee injured on the job starts to heal? In most cases, they’re required to stay home until they are completely recovered and ready to return to their previous duties. 

The problem with that is it can have negative impacts on the employee’s mental health, and it costs more money. A return-to-work program can help here.

What’s a return-to-work program? 

It’s exactly what it sounds like: a strategic plan that helps employees return to work in a capacity that’s suited for their temporary capabilities and helps them earn an income until they’re ready to return to their previous position. 

You can think of it as a graduated program that consists of light duty, moderate duty, and full duty positions. An injured employee might be able to handle clerical tasks while they recover from their injury, then move up to slightly more physical tasks, and then finally resume their regular responsibilities.

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Create a No Drugs or No Alcohol Program

Drugs and alcohol should never be tolerated on the job, but things often go unnoticed or unreported, particularly in fields like construction, metal fabrication, and the HVAC industry. A beer at lunch might not seem like a lot, but it can make someone less attentive to their surroundings and their actions, leading to a serious injury. 

Implementing a strict no-tolerance policy for alcohol and drugs can dramatically reduce the risks that one of your employees will be injured on the job. Alcohol and drug use are the most common reasons for workplace injuries. 

You may also qualify for a workplace credit if your business is located in one of the several states offering this program.

To successfully implement such a program, you’ll need to focus on two aspects –– education and testing. 

Begin with education. Teach your employees about the dangers of drugs and alcohol, not just in relation to workplace accidents, but also including the impact on their physical, mental, and emotional health.

Then you’ll need to implement drug and alcohol testing. Random testing can help identify drug and alcohol use on the job, but you’ll also want to implement return-to-duty testing, follow-up testing, and post-accident testing to cover all your bases.

Of course, you’ll want to ensure that you’re tailoring your program to relevant factors. All states have specific laws regarding testing, for instance. Your industry might also have stringent requirements when it comes to drug and alcohol use and testing. Finally, you may have some flexibility yourself when it comes to choosing testing methods.

We can help you lower your premium costs

Ready to save money on your HVAC workers’ comp coverage? It starts with getting a free, instant quote through Kickstand. Then we’ll have a quick conversation to ensure that you have your workers classified correctly and that you’re paying the right rates. 

It’s never been simpler to find affordable coverage, protect your employees and your business, and comply with state workers’ compensation requirements.