Currently, on-the-job incentive programs are often based on on-site confirmation of compliance with standards that align with or exceed those outlined by the Occupational Safety and Health Administration. These standards often do not lead to meaningful reductions in workers' compensation claims and increased profitability of a project because of the subjective nature of safety enforcement. One simple modification to the typical loss control incentive program is structured around a statistically driven bonus system that rewards subcontractors participating in a project's workers' compensation wrap-up program for better-than-expected claim experience. Many of the same proven allocation methods often used by corporations to transfer the cost of workers' compensation insurance to their various departments can be used to help the owner or subcontractor in determining the claim experience expectation for the subcontractor.

This article was originally published in the June 2015 issue of Best's Review.