On a personal level, it's satisfying to enjoy a friendly and respectful working relationship with your employees. But when it comes to resolving workers' compensation claims, a good relationship can translate later into some major business savings.

No matter what type of business you run, employees that injure themselves on the job must be compensated. The cost of workers' compensation insurance - the monthly premiums a business pays - is affected by many risk-related factors, one of the most important of which is the size of benefits payments that are awarded for filed claims. In 1998 (the most recent year for which the National Academy of Social Insurance has figures), workers' compensation benefit payments for claims filed in the U.S. totaled $41.7 billion.

Businesses can certainly do their part to keep premiums low by limiting risk for injury. But if you do find yourself in the unfortunate situation of having a claim filed against your company, there are still ways to work in your company's best financial interest. In fact, how an employer acts from the period between filing and resolving the claim can play a major role in limiting the size of damages awarded.

Pamela Rippens, the assistant vice president of Specialty Services, a risk-management company in Connecticut, spoke to this effect at the National Workers' Compensation and Disability Management Conference held in Chicago in early December 2000. Rippens said that the relationship built and maintained between employee and employer is a valuable component in cost savings on filed claims.

"Resolving workers' compensation claims is easier and less costly if a strong employer/employee relationship exists from the date of injury through the resolution," Rippens said. The more positive the relationship, the more likely it is that the employee will return to work.

She added that employers had many opportunities to do this, saying, "It's a matter of jumping in to make it happen."

Rippens had some suggestions on how to limit the damages for businesses involved in workers' compensation claims:

Keep communication going. Rippens said that even simple weekly phone calls to share the latest goings-on in the company can help the employee stay connected and possibly return to work sooner.

Modify the job. If the injury keeps an employee from doing his or her regular job, consider offering a reduced role, or tasks that have been modified to be completed more easily.

Talk to the doctors. Make sure any physicians that are treating the employee are in the know about the condition of the work environment.

Report claims early. The earlier injuries are reported, the lower the awarded benefit is likely to be. According to a claim study by the Hartford Financial Services, claims reported 29 days or more after an accident result in about a 45 percent increase in loss costs.

Businesses can't prevent injuries; likewise they can't avoid insuring themselves against workers' compensation claims. But by keeping these points in mind, you can make withstanding such claims a little less unpleasant - and help keep your premiums from skyrocketing.