6 Tips to Reduce Your Electrician Workers' Comp Costs

Understanding your ExMod and how it impacts electrical workers’ comp costs

Your experience modifier (ExMod), is a simple ratio that compares your workers' compensation claim history to other similar businesses in your industry and local region.

With an ExMod, a lower number is always better. A lower ExMod means your total claim costs are lower than the industry standard. Anything above a ratio of 1 will generally mean higher than normal premiums.

Many of our tips to reduce your electrical workers’ compensation costs help to reduce your ExMod over time.

These tips are wise investments that have a measurable impact on your bottom line. 

You can think of your ExMod as similar to a credit score. It takes a little time and diligence to improve it, but once you do you can enjoy savings for years to come.

Now that you understand what an ExMod is, let’s dive into the 6 ways to lower your workers’ comp costs for electrical workers.

#1 Create a safety program and perform regular audits

Safety should have the same importance as any other business metric such as costs or margins. A documented safety program can help improve your ExMod and lower your insurance costs.

Create a safety team lead

If you don’t currently have a robust safety program, creating a team lead is the first step. This team lead will be the point of contact and liaison for employees and key people within your company.

Identify safety risks

Depending on the jobs your company takes on, there may be specific safety risks. This includes working on lifts or with other heavy equipment. These areas may require specialized training or safety programs.

Document your safety program

Your safety program should be a written document that all employees have access to. You should also keep a record of each employee acknowledging the internal safety program or any external training.

Create an incident reporting protocol

When employees recognize a safety issue or if there’s an accident, they should know exactly who to contact and what the procedures are. An open and risk-free communication channel allows employees to voice safety concerns before they lead to an injury.

Audit your safety program regularly

A safety program needs to be up to date. Annual or quarterly audits help to ensure that gaps haven’t formed in your training or within other aspects of your safety program.

#2 Properly classify your workers

All employees covered by workers’ compensation insurance are classified by codes. The codes are set by the National Council on Compensation Insurance (NCCI) and relate to the type of work an employee does and the risk associated with that work.

Properly classifying your electrical employees ensures you are not paying inflated premiums that are unnecessary.

For electrical work, there are several different electrician workers’ comp codes depending on the type of work being performed:

Class Code 5190 

This covers most electrical work performed by electrical contractors. It also includes wiring installation in homes and commercial spaces.

Class Code 7605 

This code is for electricians performing burglary or fire alarm installations for home or commercial properties.

Class Code 9516 

Home theater installation, repair, or service generally falls under class code 9516 if the worker performs no other electrical work.

Class Code 7538 

This code is reserved for powerline and utility work involving higher voltages.

Keep detailed and accurate hourly payroll records, including each employee’s job role to ensure that they have the right class code and you always pay the lowest possible rate.

Kickstand tip:

If you have workers who are strictly clerical, meaning they stay in the office and don’t work with anything electrical, you can save a lot of money by using class code 8810 which is meant for clerical workers.

#3 Provide and enforce the usage of PPE

Providing the proper PPE for every employee is a cost-effective way to reduce your electrician workers’ comp premiums by reducing your overall claims.

Make sure you provide the correct PPE for each job and create a training program so that every employee understands how to use the equipment.

Flash suits: Flash suits provide a critical layer of safety for those working around voltages above a certain threshold. Double check that the flash suits you provide are rated for the voltage of each job. 

You should also check that flash suits are in good condition and free from any wear or defects that could reduce their protection.

Insulating gloves: Provide employees with insulating gloves that are rated for the type of voltages the employee will be working with. OSHA recognizes 5 levels of protection for insulating gloves based on voltage (phase to ground or phase to phase).

Eye protection: Wearing eye protection on any job site should be mandatory. You should provide different sizes and styles of eye protection to accommodate each employee.

Other job-specific PPE: The list above covers the most common electrical PPE. However, depending on the work environment, there may be specialized PPE needed for dealing with fall risks or other hazards present on the job site.

#4 Report Claims promptly

When a worker gets injured on the job, you need to report the claim in a timely manner. This will depend on your state and insurance company but can range from 24 hours and upwards.

Delayed reporting can result in fines as well as an increase in premiums.

#5 Be truthful about your Workplace Risks

When working with your workers’ comp insurance carrier, providing the most accurate information possible can help to lower your rates.

When information is missing or vague regarding the specific tasks an employee is performing, the insurance carrier will generally assume the highest risk possible. This means higher premiums.

Areas to consider include whether your electrical workers operate in elevated areas or underground, and the voltages they encounter during their job. 

For example, jobs involving generators and transformers can be riskier due to high voltages, while installing holiday lights may involve working at heights, especially during slippery conditions. 

Kickstand Tip

Myth: Being vague is better when providing information to insurers. 

Reality: This misconception can lead to higher premiums since insurance carriers may assume the worst-case scenario. 

Be specific. Detail your operations clearly. This helps ensure you’re not paying for unnecessary risks.

#6 Implement a Return-to-Work Program

A return-to-work program is a way to help injured workers return to their jobs in a limited capacity. 

Workers’ compensation insurance pays employees a percentage of their wages when they can’t work after an injury. The sooner they can come back to work, even in a limited role, the lower the total insurance payout for the claim is.

Over time, this lowers your total claim costs and helps to lower your ExMod.

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Explore more ways to lower Workers’ Comp Premiums

Premium rates will vary between different insurance companies. This means it’s essential to work with an agent who knows what each insurance company likes to find the lowest rates available.

At Kickstand, we offer a free electrical workers’ comp quote, so you can find out how much you’ll save without any risk or obligation.

Get your free quote today from Kickstand and start enjoying lower premiums that bolster your bottom line while still offering the protection your business needs.