5 Tips to Reduce your Property Management Workers' Comp Costs

Understanding your Property Management company’s ExMod

One of the most important factors that insurance companies use when determining your premiums is your experience modifier (ExMod).

Here’s a simple example to explain how it works. Let’s take 2 drivers. One has had a bunch of accidents in the past year and the other has a clean record. Statistically, the first driver is more likely to get into another accident because he has had a lot  of accidents in the past. Therefore his car insurance will cost more.

The ExMod is a simple ratio that compares your workers’ comp-related costs for the insurance company relative to other similar businesses in your area.

Any ExMod ratio under 1 means you are saving money compared to your competitors. A ratio above 1 means you’re paying higher premiums that you may be able to reduce.

The lower your ExMod, the lower your workers’ comp premiums will be. Lowering your ExMod does take a little time, but you should think of it as an investment. Once you’ve started making a dedicated effort to lower your ExMod, you can enjoy substantial savings year after year.

Now that you understand the benefits of a low Exmod, we’ll go over our top tips to lower it over time as well as ways to start saving money as soon as possible.

#1 Classify your Employees correctly 

One of the fastest ways to lower your property management workers’ comp premiums is to ensure your employee are classified correctly.

With workers’ comp insurance, employees are matched to a 4 digit code based on the type of work they do. These codes are set by the National Council on Compensation Insurance (NCCI) and can vary slightly from state to state.

Each code is like a barcode to reference a codified job description and risk rate for a typical worker performing that job.

It’s very common for property management companies to use the wrong code when classifying workers. In these cases, workers are generally classified under a code that is more expensive than it needs to be.

Kickstand Note

A typical mistake is to use NCCI code 9015 exclusively. This code is for building or Property Management and can include all other employees who don’t specifically fall under other categories.

While that can seem like a good “catch-all” code to cover your employees, many employees within a property management company likely qualify for a lower-cost code in their state.

For example, workers who perform leasing or clerical duties can use code 9012 instead, which has substantially lower rates, sometimes as much as 50% lower.

Using this example, you can see that having a few employees with the wrong classification can double your insurance rates.

#2 Create a well-rounded Safety Program

One of the best ways to lower your premium is to implement a documented safety program.

A robust safety program should include safety best practices for specific tasks your employees are performing. For maintenance or janitorial workers, this includes the use of job-specific Personal Protective Equipment (PPE).

For clerical or office workers, this may include best practices for ergonomics to avoid repetitive stress injuries.

Below are three key areas that make for a strong safety program.

Documentation

A safety program needs to be well documented and accessible by all employees. Paper copies and digital versions should be accessible at the workplace and on demand.

Record keeping

Ensure you’re keeping records of when employees undergo your safety training or program. They should have mandatory safety training on a quarterly or annual basis. 

You should also keep detailed records of any safety issues they encounter so you can deal with it before it turns into a workplace injury.

Having an open line of communication so workers can alert management of safety issues is a key part of this process.

Ongoing safety audits

As your property management business evolves, you may need to update your safety program to address risks on other types of properties or services.

To learn more about how to create a safety program, read our How to Create Effective Workers’ Comp Safety Programs blog that will guide you through the process.

#3 Specify the work you do and don’t do

When working with an insurance company, you want to be as specific as possible when detailing the unique aspects of the properties and what tasks your workers perform while managing them.

If there is any lack of specificity in this area, the insurance company usually assumes a higher risk, which means higher premiums.

For example, if specific maintenance tasks are outsourced to external contractors, you might be able to use a different code for employees and lower your insurance premiums.

So if your company outsources any work or even just a portion of work, make sure to discuss these specifics with your workers’ comp insurance provider.

#4 Maintain accurate Payroll Records

Since your property management workers’ comp premiums are based on the hours worked, keeping accurate payroll records is crucial to avoid overpaying when it comes to workers’ comp rates.

On the flip side, underreporting hours can lead to penalties, which drive up your costs and can lead to other problems.

Keeping accurate payroll records and working with your insurance carrier during a payroll audit helps to ensure you always pay exactly what you owe and not a penny more.

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#5 Create a customized return-to-work program

Another way to lower premium costs is to cut down on the total number of claims and the cost of each one. While this is not an instant way to lower your premium, over time this will drastically reduce your overall claims cost, which will keep your Ex-Mod down and significantly lower your premium cost in the future. 

The length of time that an employee is unable to work while receiving workers’ compensation benefits impacts the total cost of the claim. So the sooner you can bring an employee back to work after an injury, the lower the total cost for that claim will be.

To help bring back workers as soon as possible and in a safe manner, you’ll need to have a return-to-work program that outlines the process.

This may include options with limited tasks or reassignment to other duties to match the employee's current abilities.

Every business will require a unique return-to-work program based on the type of work and available positions within the company. The key is to be as flexible as possible and create an easy path for workers who want to come back in a limited fashion.

Start lowering your Property Management Workers’ Comp Premiums today

Property management companies can face unique challenges when it comes to workers’ comp insurance. Thankfully, the insurance experts at Kickstand are here to help guide you through the process.

At Kickstand, our mission is to help businesses find the lowest premiums possible so they can protect their employees while still maintaining a strong bottom line.

Get started today by requesting your free, no-risk quote from Kickstand. Our property management insurance experts are also available to answer all of your questions to help you find the best rates based on your unique business.