6 Tips to Reduce Your Landscaping Workers’ Comp Costs

#1 - Check Worker Classifications and Exclusions

A common reason businesses overpay for landscaping workers' compensation insurance is misclassifying employees. Here’s why it matters - 

Each job in your company is assigned to a specific class code based on the kind of work that employee does. Each class code has a risk rating which is a numeric value that represents how likely the worker is to get hurt.

• Clerical workers (low-risk desk work) use class code 8810
• Lawn care workers (higher-risk manual labor) use class code 9102
• Landscape gardeners (tasks like sod laying and grading) use class code 0042

If your employees are assigned the wrong landscaping class code, you could be paying more than necessary. Review your classifications carefully and ensure they are accurate.

Kickstand Tip

As a business owner, you don’t always need to include yourself in your workers' comp policy. By excluding yourself, you could save a significant amount on your premiums, especially if your payroll is large.

Just make sure you have other health coverage and talk to your insurance agent to see if this is the right choice for your business.

#2 - Implement a Safety Program

A strong safety program can help prevent workplace injuries, which means fewer claims and lower workers' comp costs. 

It’s designed to educate employees on safe workplace practices, how to identify risks and threats, and provide ongoing safety-related training. 

It can include simple things, like ensuring everyone understands the importance of personal protective equipment (PPE) like safety glasses and earmuffs. 

It can also include more complex elements, like creating a safety team responsible for training employees, ensuring everyone has the appropriate PPE for their role, and conducting safety checks.

Here’s what you’ll need to do:

• Form a safety team and appoint a team lead.
• Identify risks specific to lawn care businesses, like equipment injuries or heat-related illnesses.
• Train employees on safety protocols and the importance of personal protective equipment (PPE), such as safety glasses and ear protection.
• Document the program and make it available to all employees.

Put all of this into a formal document (we recommend both a digital file and a physical binder) and ensure that it’s available to your employees. 

Share the document with your insurance company to possibly qualify for discounts and show that you're serious about safety.

#3 - Create a Drug-and-Alcohol-Free Workplace

To create a drug-and-alcohol-free workplace program, you’ll need to formalize the following:

• A workplace drug-and-alcohol use policy
• The consequences of violations, including initial and subsequent infractions
• Ways employees can find help with alcohol and drug abuse issues
• How you’ll support employees returning to work

This information should be readily available to employees (again, we recommend both digital and physical formats).

Remember to tell your insurance company about it so you can possibly qualify for discounts.

#4 - Design a Return-to-Work Program

A return-to-work program is a strategy that helps bring injured or ill employees back to work faster. You’ll follow a graduated strategy that allows employees to return to a position that’s right for them at the time and then slowly work their way back to their original position.

For instance, an injured employee might be able to handle clerical work, but not the exertion of handling landscaping equipment. They could come back with a desk position and then move to a more labor-intensive position as they heal and recover.

Employees supported by a return-to-work program return to work faster and recover more quickly. Employers also reduce their workers’ comp premiums because of that.

#5 - Understand your Ex-Mod

Your Ex-Mod, or “experience modification rate” is a number that reflects your company’s safety record compared to others in the industry. 

Let’s say there are three landscaping businesses in your local area. Two of those have had no workplace accidents in the last year. However, two of your employees have been injured recently. Your Ex-Mod would be higher because of that because your employees are statistically more likely to be injured in the future. 

The more frequent and severe your losses (such as employee injuries, illnesses, or fatalities), the higher your Ex-Mod will climb—and with it, your landscaping workers' comp costs.

Reducing your Ex-Mod takes time, but it’s possible by implementing the tips we’ve discussed so far here – creating a safety plan, enforcing a drug-and-alcohol-free workplace policy, and implementing a return-to-work program.

With patience and consistency, you can bump that number down and you’ll find that your workers’ compensation costs follow.

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#6 - Take advantage of Dividends

Dividends can be a hidden goldmine for lowering your workers' comp costs, but they're not guaranteed. After your policy ends, your insurance company might give you some money back based on how many claims you’ve had and how well the company performed.

There are two types of dividends: 

• Sliding scale dividends: These are based on your claims history. The fewer claims you have, the bigger your dividend. This structure rewards businesses with strong safety records, making it even more important to maintain your safety programs and return-to-work initiatives.
• Flat dividends: These are a set percentage of your premium, regardless of claims history. Flat dividends can offer more predictable returns but may not maximize savings as much as a sliding scale dividend if your claims history is clean.

Dividends are a great way to lower your workers' comp costs and reward your commitment to a safer work environment. Be sure to ask your insurance provider if they offer this option and how you can qualify.

Get expert help on how to reduce the Workers’ Compensation cost for your Landscaping Business

Reducing your workers’ comp costs doesn’t have to be complicated. Kickstand Insurance is here to help. We can review your policies, compare quotes, and find the best solutions for your lawn care business.

Ready to see a difference in your workers’ comp costs? Get your free instant quote and we’ll be happy to show you how we can help!