By Matt Zender
It’s something a small business owner just has to carry – workers’ compensation insurance. Perish the thought of ever having to use it, and all the policy options essentially provide the same coverage for a loss that occurs. So why should the carrier matter to agents? Because it's better to understand the differences between carriers before your client ever has to file a claim.
5 Things to Demand From Your Carrier
Chief among what separates carriers are factors related to the trust and confidence you have in who you’re working with, and the added-value services they can offer to improve the way you run your business.
A carrier’s financial rating is a proxy for the strength of the firm. While workers’ compensation coverage is statutory, you need the carrier to be around and able to pay claims when they arise. A.M. Best is one reputable rating service.
An “A-“ rating, or better, is considered “very strong,” which is recommended. A.M. Best also rates the financial size of a carrier based on its cash reserves to pay claims. Look for a rating of 10 or higher (note that financial size ratings are listed in Roman numerals).
Tools and Resources to Manage Your BusinessCarriers vary on the level of convenience services they offer to help your clients run their business and minimize workers’ comp claims. Examples include an online portal for viewing claims, and access to loss control resources – safety presentations, online safety training videos) to improve company safety protocols, and even on-site assessments to identify risks and help formulate safety strategies.
Workers’ Comp Claims ExpertiseYou want to work with a carrier not only with a specialty focus and expertise in workers’ comp, but one that will handle claims aggressively. By aggressively, we mean one that meets the needs of both the employee and the insured; who explains to an injured worker her/his rights and the process that will be followed; a carrier that works efficiently to get to a closed claim – one that works out for the employee and the company, and gets the injured worker back on the job in a timely manner.
Flexible Payment OptionsPaying for workers’ comp coverage can be a cash flow burden for some small businesses, and some carriers recognize that by offering flexibility in how insureds can be billed. Options include breaking up estimated payments monthly, quarterly or annually; and some offer a budget-friendly, pay-as-you-go plan that corresponds directly to a company’s payroll provider, invoicing the precise amount each pay period based on actual payroll. Another way to add convenience and save costs is to choose a carrier that offers price breaks for bundling other small business insurance coverage.
Competitive RatesNone of these convenience offerings matter much if a carrier’s premium is 25 percent above the other options. At the same time, considering price alone can be a mistake if it comes at the cost of compromising other important factors outlined here.
As opposed to other lines of insurance your clients carry, in workers’ compensation insurance there are no limits to the losses it covers in the workplace. That said, there are notable differences among the carriers, and agents have a choice in who to work with.
Do your research and choose wisely. The well-being of your business, and that of your clients, depends on it.Want to provide high-quality workers' compensation insurance to your clients?
Matt Zender is vice president, workers’ compensation product manager for AmTrust North America, a multi-national property and casualty insurer specializing in coverage for small businesses.
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Editor’s Note: This blog was originally published on June 11, 2015 and has been updated and edited.