How Home Builders Can Reduce Workers’ Compensation Costs

Filed in Business Management, Safety by on November 11, 2020 5 Comments

Business owners in the home building industry are always looking for ways to reduce costs. Many have noted soaring costs tied to workers’ compensation insurance.

The most direct way to reduce these costs is to have a comprehensive safety training program in place to prevent job site accidents. But even builders with a safety-first mentality have seen workers’ comp costs rise in recent years.

Alan Banks, a home builder in the Carolinas, teamed up with insurance expert Treacy Duerfeldt of the Nationwide Contractors’ Alliance to create a video explaining exactly how home builders can reduce their workers’ comp costs.

The video, embedded below, notes that the best path to lower costs is having a plan in place to deal with injuries that includes:

  1. Knowing the location of the closest healthcare provider for each job site;
  2. Having a policy that prevents injured workers from driving themselves to seek medical care;
  3. Being aware of the documentation of the injury submitted from a healthcare provider; and
  4. Having a return-to-work, light duty program that allows workers to return to work with different responsibilities until they are well enough to resume their regular duties.

Duerfeldt called this plan a part of being “claims ready,” and encourages home builders to train all workers on the specifics of the plan.

“Companies that are claims ready saved 17% on their workers’ comp costs across all trades and all company sizes,” says Duerfeldt.

Watch the video below for more details on workers’ comp readiness.

For questions about workers’ compensation in home building, please contact Felicia Watson.

Comments (5)

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  1. For over 30 years members of the Home Builders Association of Kentucky (HBAK) have participated in a construction only Workers Comp Self Insurance Fund. As of today, there are 2,507 members participating and most will qualify again for a portion of our annual dividend payment this year of $9,023,004. All of this while seeing Workers Comp rates decrease since 2017 as following:

    2017 > – 3.33%
    2018 > – 2.61%
    2019 > – 9.27%
    2020 > – 3.50%
    2021 > – 3.40%

    Utilizing a Third Party Administrator and governed by HBAK Trustees, we have provided a reasonable alternative coverage while maintaining an AM Best rating of A-.

    Mike J Kegley
    NAHB and HBAK member
    Workers Comp Trustee

  2. Jack Baker CIC CPCU CLU CRM says:

    here in the KC area, we have an active HBA and a great self insured fund on the Kansas side, Kansas Builders Insurance Group (KBIG) for Workers Compensation. Dividends available and great loss control and claims handling.

  3. We had a self insured trust in TN until a few years back. We were forced to abandon that for a much more costly (insurance company) alternative. I am a small builder that pays all the fees mandated by state law and have very little if any voice. I could never find out what happened to the funds that were in the trust or why it was no longer an option for TN contractors. I have my opinion but that does not matter I had to continue to build homes to provide for my business and family. Currently I am seeing an influx of uninsured and unlicensed builders. I was told by the contractor inspector of regulatory boards that I had to go thru the formal complaint channels to get any action on these complaints. Also told by some workers compensation officials that violations were a civil crime and could not and would not be enforced by the state. I cannot get help. PLEASE HELP

    • NAHB Now says:


      Workers’ compensation matters are very local. We recommend you reach out to your local HBA or the HBA of Tennessee for state-specific guidance. You may also check with the Tennessee Department of Commerce & Insurance to see if they can help. Ask.TDCI@TN.Gov

  4. Absolutely! Thank you very much. This will save you a load of trouble down the road. Modify the safety program if needed to address this type of problem.

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