Avoid the “Seven Deadly Sins of Workers’ Comp”

No sloth here! This chipper operator is following proper procedures, wearing proper PPE and using best practices – standing off to the side and not in front of the chipper chute. TCIA staff photo by Kathleen Costello, from a Massachusetts Arborists Association event on Arbor Day 2018.

If ever there is a place where the phrase “attitude is everything” holds true, it is certainly in the world of Workers’ Compensation insurance. After partnering with tree care companies for the past 15 years, I’ve noticed distinct patterns in the attitudes of business owners in how they view workers’ comp and their individual company’s financial strength. These observations led to the creation of the “Seven Deadly Sins of Workers’ Comp” – an analogy used for the classification of vices within Christian teachings – to help tree care owners and managers avoid destructive behavior.

When a tree care company exhibits any of the characteristics listed below, there are grave consequences to both the business’s fiscal health and overall culture. The seven sins are listed here, starting with the most dangerous and working down to least dangerous for a tree service.

Pride

Dangerously corrupt selfishness – The deadliest workers’-comp sin is pride. Pride results when tree-service owners believe they are already doing the best they can to prevent injuries from happening and that they know everything about how to handle them. This prideful mindset blocks their ability to learn and grow as a leader for their company, putting their organization and everyone involved in a very precarious situation. Being open-minded to suggestions and improvements on safety and injury-handling practices can combat pride. A tree care company owner can never learn too much about how to keep his or her employees safe and how to lessen the impact of injuries.

Wrath

Uncontrolled anger or vengeance – Far too often, a tree care owner or leader gets so fed up with workers’ comp that they assign the responsibility to someone else in their company. Their frustration, anger and negative attitude about the system demolishes any positive aspects of workers’ comp and sets the company up for failure. A commitment to building a strong safety culture and implementing proper documentation and best practices for workers’ comp must start at the top of the company. The leaders should employ others on the team to help achieve success; however, the responsibility should never be assigned to someone else out of frustration or anger at the system.

Lust

Intense longing – Every tree care company wants the lowest possible cost for their workers’ comp. However, the intense desire for the lowest cost often blinds the business from how to properly achieve it. The insurance industry, unfortunately, has played a large part in creating this longing. Rather than helping to educate their clients and prospects on how to reduce their long-term workers’-comp costs, most insurance agents focus only on beating the price of the current insurance company.

This is exactly what happens to your customers when your competitors are focused solely on providing cheap tree care services and do not take the time to work with the customer on proper tree care. It is perfectly normal to want to get the lowest cost for your Workers’ Compensation insurance policy; however, the owner needs to make sure they understand how the system works so they can continue to keep their costs as low as possible into the future and not be blinded by a one-time low quote.

Sloth

Lack of interest – The workers’-comp sin of sloth is similar to pride, but instead of the tree care owner believing they are doing everything they can, they have a disinterest in proactively preventing and managing injuries. Accepting that injuries are “just a part of tree work” is the surest way to have your company suffer because of them. The impact of the injury multiplies significantly when the tree care owner intentionally does not do anything to manage the injuries when they do happen. To avoid this, the owner must commit to preventing injuries from occurring and create a process to consciously manage them. Written policies and procedures, like safety and return-to-work programs, as well as injury-reporting guidelines, are part of the preparation a tree care company should go through to minimize both the financial and emotional pain of an injury.

Envy

Insatiable desire – It doesn’t happen often in the tree care world, however, some employees will view workers’ comp as an easy paycheck and grow envious of those who get a “free ride” from the workers’-comp insurance after an injury. If an employee is injured and cannot perform their assigned work duties, they will receive a paycheck from the company’s workers’-comp policy. To dodge this sin, institute a formal return-to-work program outlining what tasks an injured worker can perform for your company. Make this a part of your employee handbook and have all employees sign the handbook, stating they understand that if they’re injured, the company will provide work for them to perform within their medical restrictions. Communication between the tree care company, the injured employee and the treating physician is critical for an effective return-to-work program.

Gluttony

Overindulgence – Not only can an injured employee abuse the workers’-
comp system, but tree services also may be gluttonized by the medical community. The overwhelming majority of doctors will do their best to return the injured employee to work as quickly as possible. However, a tree service must make sure the treating physician doesn’t see a workers’-comp claim as a blank check. Treating physicians have the authority to assign the injured employee off of work to help the injury heal. Thus, just like with envy, having a solid, written return-to-work program in place protects a tree service from being taken advantage of. Ensure that the doctor knows immediately of any light-duty work available, so they can write any physical restrictions to accompany the light duty. Top-performing tree care companies have established relationships with medical clinics before any injuries occur, thereby eliminating most of the potential for errors in communication, and/or gluttony, by the doctor.

Greed

Desire by trickery – The final workers’-comp sin happens when tree care owners intentionally misclassify their employees on their Workers’ Compensation policy to get a lower rate. Like other forms of deception, intentionally misclassifying employees sets up the tree service for audit penalties and disciplinary action from the Workers’ Compensation insurance company. Not only will the tree service receive an increase in premiums from the audit, many insurance companies will non-renew policies if different classifications should have been used at the start of the policy. The acceptance of different class codes is something that needs to be agreed upon with the insurance company prior to the policy start date. Owners must work with their insurance agent to understand how to track and report payroll if they can use multiple codes for an employee.

Conclusion

Don’t go to workers’-comp hell! Avoid the “Seven Deadly Sins” to keep your business as strong as possible.

Eric Petersen is president of ArboRisk Insurance, a seven-year TCIA Corporate Member company based in New Berlin, Wisconsin.

This article is based on his presentation on the same subject at TCI EXPO 2019 in Pittsburgh, Pennsylvania. Click below to listen to an audio recording of that presentation.

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