Now More Than Ever, You Need Workers' Comp Insurance

Posted by Matt Reilly on Jul 13, 2017 10:28:48 AM

The American worker is living longer and retiring later than ever before, meaning there are more and more people aged 55 or older in the workforce, and the trend is not going to slow down anytime soon.

Combine this with the increasing rate of chronic health issues among Americans (we’ve all heard the stats about obesity in adults) and something becomes frighteningly clear...

Work-related injury is still a serious threat, even as worker practices become increasingly safe. To protect themselves from these employee risks, business need to invest in a workers’ compensation policy that can compensate for the changing times.

An older workforce creates many complexities in the cost of workers’ compensation, nearly all of which increase the financial burden on insurance companies, which will force prices up. The silver-lining for employees nearing their silver anniversaries? Older employees are often more experienced, which can actually result in fewer operational accidents. The veteran of the factory, for example, knows how to use the big machines correctly, and is very unlikely to hurt him/herself doing so.

However, experience is where the positive differences end. Older employees have a much higher rate of chronic health conditions, and significantly longer recovery times. And even though their experience may safeguard them from certain injuries, employees age 55 and over are actually more likely to be hurt on the job, overall.

The higher rate of injury, combined with the increased treatment costs associated with chronic conditions and slower recovery, translates into a greater risk for businesses than employees have been in the past.

Will this lead to businesses showing favoritism toward younger hires? Could it convince businesses to offer early retirement benefits to aging workers? These practices wouldn’t decrease workers’ compensation premiums directly (since premiums are calculated based on the nature of the work, not the worker), but hiring employees that are less likely to be injured can reduce your rates in the long-run by helping you avoid accidents that would hike your rates.

Other than having a workers’ compensation policy, investing in workplace safety and awareness is key to keeping your incident rate, and cost of insurance, low. It might very well be worth investing significant money in upgrading your business’s safety precautions if it means reducing your workers’ compensation costs over several years of operation.


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