If you’re a safety conscious New York business struggling with out of control workers' compensation costs, maybe it’s time to consider a New York safety group as an alternative to your traditional New York workers' compensation insurance coverage.
What are safety groups?
Safety groups are a collection of companies in the same trade or industry with similar jobsite conditions, work related risks, and hazards encountered during their daily operations under a given insurance policy. You can find New York safety groups for companies in construction, manufacturing, electrical, retail and many other industries.
How do safety groups work?
A Workers’ Compensation safety group offers an alternative approach to securing full statutory Workers’ Compensation coverage for a homogeneous group of companies. Through disciplined underwriting and aggressive risk management, a safety group is able to provide preferred pricing by pooling members’ annual premiums. After deducting claims and administrative costs, profits are returned to members in the form of a dividend.
Are safety groups more stable than self-insured trusts?
A lot of businesses seem to think so. Historically, trusts have had radically variable track records, and 17 self-insured trusts collapsed in New York State alone between 2006 and 2008. Companies in these trusts have become increasingly worried about their ability to pay future workers’ compensation claims due to inadequate funding. As a result, safety groups have seen a migration over the past several years of entities previously covered by self-insured trusts.
When you join a trust, you’re not actually purchasing an insurance policy, so you’re not actually transferring your risk exposure or liability to an entity such as an insurance company; you’re transferring the liability to members of the trust. In contrast, safety groups offer a fully insured, low risk, low cost alternative to private insurance carrier plans and self-insurance, with significant benefits including …
- Discounted insurance costs
- No exposure to joint and several liability (unlike Self-Insured Trusts).
- A comprehensive service package
- Year-end cash dividends
- Reinsurance protection
- Return-to-work plan implementation following early medical monitoring activities
- Claims reductions through safety program development and implementation
- Improved morale and employee productivity
- A competitive advantage over your competition who are still tied down to traditional insurance policies
The concept of New York safety groups is certainly nothing new. Their formation was authorized by Section 97 of the 1913 Workers' Compensation Law. But in these tough economic times of increasing workers’ compensation costs, businesses are forced to come up with new strategies for trimming costs and protecting their bottom lines, and safety groups are gaining popularity as the timely, affordable and efficient solution many New York businesses need to stay competitive.