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3 Trends Affecting Workers' Compensation Insurance

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Employers are supposed to create a safe work environment for workers to perform their duties effectively. However, accidents happen, and employers must always be prepared for such eventualities. As insurance companies try to sell workers' compensation policies to businesses, it is crucial to understand trends affecting the sector. The developments dictate how insurers should package workers' compensation insurance policies for the benefit of all parties. This article highlights the top trends affecting workers' compensation insurance.

1. Comprehensive Workplace Drug Test

Workplace drug tests are legal in Australia, which is critical for preventing workplace accidents. However, few businesses have a comprehensive workplace drug test policy. The lacklustre approach to drug testing creates loopholes, which staff might take advantage of and cost business owners a lot in compensation claims. For instance, if employees know that drug tests are conducted every first Monday of the month, they might indulge and only stop one week before the test date. Thus, insurers must examine an organization's workplace drug test policy before proposing a premium structure. Typically, a firm with a comprehensive drug test policy pays lower premiums, whereas a company without one pays higher premiums.

2. Catastrophe Response

Severe catastrophes in the workplace can cause severe injuries to workers and affect business operations. For example, if an industrial facility's wall caves in and falls on workers, other parts of the premise might become unstable. An employer's response in such cases determines how fast staff are rescued from impending danger. Therefore, a business that lacks a robust catastrophe response strategy puts its employees at risk of debilitating injuries. Such entities qualify for a workers' compensation policy with higher premiums. On the other hand, a detailed and effective accident response strategy reduces the severity of injuries in case of an incidence, lowering insurance premiums.

3. Workplace Mental Health Management

A common misconception among employers is that mental illnesses cannot develop in the workplace. However, nothing could be further from the truth because unhealthy work environments cause severe stress, and in extreme cases, mental illness. Work-related psychosocial hazards have emerged as the leading contributors to workplace accidents. Therefore, companies must create a conducive work environment and implement stress management strategies, such as hiring counsellors. Notably, insurance companies consider mental health management initiatives when selling workers' compensation policies. Firms with holistic mental health strategies in place are more likely to pay lower premiums compared to businesses without such plans.