How much profit is gained by reducing the workers’ compensation insurance premium? Premiums may be reduced simply by participating in a loss prevention program that the insurance carrier provides as part of the insurance premium. It may give a company a reduction in the premium if a safety committee is in place, or implement the recommendations made by a loss prevention specialist from the insurance company. The amount of reduction depends on the insurance company. If the insurance company offers a 3% discount on a company’s premium if a company will institute a safety committee, why not begin a safety committee? The company receives the discount and has a very powerful tool to begin to incorporate safety into the culture of the company.

Example 1A: ACME will receive a 3% rebate (discount) on their annual workers’ compensation premium if they start and maintain a safety committee through the term of the policy. The rebate will be given to ACME at the end of the policy. The annual premium for insurance is $10,000.00, three percent of that is $300.00. That is $300.00 that can be added directly to the profits of the company.