How to standout in the Workers’ Compensation Insurance Niche?

Workers’ compensation insurance has often proven to be a profitable market. Not just for you, agents, but insurers alike!   

All the 50 states have the workers’ compensation program. And, according to the SSAin 2015, this program helped cover about 135.6 million employees.     

The workplace can be a dangerous place. Besides, you never know when an accident might occur. Injury Facts recorded a total cost of work injuries to be $161.5 billion in 2017! Yes, that’s a B and not an M!    

So, you can see that firms need workers’ compensation insurance. Not only will this help to compensate for the casualty. But it helps save the company’s name or avoid a potential lawsuit.    

According to IBIS Worldworkers’ compensation insurance values for $55.1 billion of the U.S. insurance market.     

Trust us. You want to be a part of this billion-dollar market!   

The workers’ compensation insurance premium went up 2.2%. And that was just in the first half of 2019.

Agents need to reap the benefit of this growing market size.    

However, this vast market does not come alone. Along with it comes a big pool of rivals!   

HO3 Insurance Policy Concerns  

The opportunities for unendorsed HO3 insurance policy are vast. And often confuse young insurance agents. We understand that you want to give the best to your clients. And for that, you should be careful.   

After all, if you fail to give your clients the best solutions, in the event of loss, coverages might fall short.  When they file for an insurance claim, only then will they realize their coverage is not enough.  

You might even lose your client.    

More importantly, you could be applying for an E&O insurance. 

According to the IIABAhomeowners’ insurance alone drives 12% out of 29% of personal lines E&O claims against independent agents. These data indicate that offering better protection for your client’s valuables will avoid accusations of advice omission.   

misconception most clients have is that their HO3 insurance policy adequately covers their personal property.   

HO3 insurance does provide content coverage under coverage C. However; there are certain sub-limitations detailed in the plan (in fine print).   

The HO3 insurance policy explicitly limits theft coverage for personal belongings like jewelry, computers, and money.   

Typically, the HO3 policy restricts the loss of jewelry, watches, and furs for theft anywhere from $1000 to $2500 depending on the carrier or state. Additionally, there is no coverage for jewelry if it gets lost on vacation.    

If you do not help clients understand this sub-limit, their personal belongings might practically be uninsured when compared to its value.    

Similarly, the standard HO3 insurance policy provides a broad form of coverage for personal property, i.e., the provision for coverage is on named perils. It shows that the HO3 does not cover all risks.   

Quick fixes      

For a quick fix, add endorsements! In the first case, you could add a scheduled personal property endorsement to the HO3 insurance policy. However, it always costs extra premium for add-ons.    

On the other hand, when your clients want full protection for their contents, you could opt for adding an endorsement. Specifically, the one that provides coverage on an “all-risk basis” instead of named perils.   

These fixes sound smooth and substantial. Most of the time, they are adept at covering clients’ valuables.

How do you differentiate yourself in this opportunity pool of workers’ compensation?

One of the traps independent agents fall into when it comes to workers’ compensation insurance is that they are satisfied with the first policy that they offer to their client.  

Agents need to understand that, like any other line of insurance, this insurance also requires time and effort.    

Almost all policies are pretty much the same because you’re dealing with a legal system.    

More so, it’s easier to get one for cheap with so much competition in this industry.     

Demand and supply, right?    

But really, don’t sweat over the competition. A report from the Global Entrepreneurship Monitor shows that 27 million Americans are commencing a new business. So, the need for workers’ comp policies is massive!    

All these new businesses. And all these opportunities to be their trusted agent!   

Sure, you need to find cheap options for your clients. But what comes with those options, that’s the essential part!    

You must make sure to provide value to your workers’ compensation insurance clients.     

It’s not just about selling the insurance at low cost but making sure that the clients come back to you after a workers’ compensation claim experience. 

Hence, quit talking about rates and focus on the cost for a client.    

HO3 Insurance Policy Concerns  

The opportunities for unendorsed HO3 insurance policy are vast. And often confuse young insurance agents. We understand that you want to give the best to your clients. And for that, you should be careful.   

After all, if you fail to give your clients the best solutions, in the event of loss, coverages might fall short.  When they file for an insurance claim, only then will they realize their coverage is not enough.  

You might even lose your client.    

More importantly, you could be applying for an E&O insurance. 

According to the IIABAhomeowners’ insurance alone drives 12% out of 29% of personal lines E&O claims against independent agents. These data indicate that offering better protection for your client’s valuables will avoid accusations of advice omission.   

misconception most clients have is that their HO3 insurance policy adequately covers their personal property.   

HO3 insurance does provide content coverage under coverage C. However; there are certain sub-limitations detailed in the plan (in fine print).   

The HO3 insurance policy explicitly limits theft coverage for personal belongings like jewelry, computers, and money.   

Typically, the HO3 policy restricts the loss of jewelry, watches, and furs for theft anywhere from $1000 to $2500 depending on the carrier or state. Additionally, there is no coverage for jewelry if it gets lost on vacation.    

If you do not help clients understand this sub-limit, their personal belongings might practically be uninsured when compared to its value.    

Similarly, the standard HO3 insurance policy provides a broad form of coverage for personal property, i.e., the provision for coverage is on named perils. It shows that the HO3 does not cover all risks.   

Quick fixes      

For a quick fix, add endorsements! In the first case, you could add a scheduled personal property endorsement to the HO3 insurance policy. However, it always costs extra premium for add-ons.    

On the other hand, when your clients want full protection for their contents, you could opt for adding an endorsement. Specifically, the one that provides coverage on an “all-risk basis” instead of named perils.   

These fixes sound smooth and substantial. Most of the time, they are adept at covering clients’ valuables.

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How do you add value to your workers’ compensation insurance clients?

Correct classification

The classification code’s basis is the broad sections of services that your client’s company provides and the nature of work.   

Are you sure that your client’s business has the correct classification?   

A construction company might have its employees listed under different codes. For example, the workers could be under NCCI class code 5610. A clerical office admin, on the other hand, could be under NCCI class code 8810.   

A small discrepancy in classifications can make a huge difference in premiums.   

Sometimes, your client might have to pay higher premiums due to this difference. Workers’ compensation claims can also suffer due to this disparity.   

Remember, when you consult your client for workers’ comp, you must be well- acquainted with the type of business they run.   

Ask them for details about the operations they handle. Examine the daily risks and dangers their clients might come across daily. Make sure you check the technology they use. Because sometimes, your clients might give you the wrong classification. Cases can arise where they might cheat in trying to save money. You need to report fraud and stand your ground.   

The nature of operations also changes with the use of technology. Like Kevin Ring of Institute of WorkComp Professionals says, “Businesses are not static, and nor are classifications.”   

Prove your value as an independent insurance agent and learn the classifications and how its rules apply.   

Learn how you can flourish as an agent after one call!

Schedule a call right now and learn how you can ease your work, sell more, and increase your profits!

Workers’ Compensation Claims and Risk Management

“Prevention is better than cure.”    

 A great deal of importance on risk management is a must when you’re defending your clients. You need to help your clients prevent workers’ compensation claims from happening in the first place.      

Risk reduction/prevention and saving costs should have a focus on these areas:    

  • Workplace safety procedures:    

Safety and compliance ordinances in the workplace will help to decrease the chances of workers’ compensation claims.       

According to OSHAemployers pay almost $1 billion per week for workers’ compensation costs.    

Similarly, if your client has a long history of workers’ compensation claims, carriers might even be reluctant to renew the policy.    

Premiums will also be higher for clients with poor workers’ compensation claims history.    

Help your clients understand this.    

   

  • Follow strict hiring standards:    

Hiring inadequate employees for massive physical works will have an adverse effect. Doing so increases the exposure to risks. Which eventually leads to the chances of workers’ compensation claims.     

When your client turns a blind eye for strict hiring standards, they expose their company to increased workers’ compensation claims.    

If you are not thorough during the hiring process, you might end up with troublesome employees in your team. They might cause problems, wrongfully sue the company just for the sake of it. You know it happens! Sure, workers’ comp coverage automatically involves workers’ compensation waiver of subrogation.  But why let it get to that stage?  

Pre examinations, especially for real jobs, should be a must for clients reaching out for workers’ compensation insurance.    

  • Occupational medical center:     

Your job as an independent agent is not to get your clients their workers’ compensation claim paid. Your job is to get the injured employee back to work, so your client is not paying for it.    

Ring suggests a back-to-work program for injured employees.     

It is much better to send the injured at an occupational medical center or a physician who understands workers’ compensation insurance, instead of a family physician.    

It would help if you advised your clients to help their employees get back on their feet.     

For instance, don’t strain the injured employee. But, don’t let them get out of work.    

Premium Audit

Premium audits don’t have to frighten your clients. 

As an agent, you can help them along this routine process.     

Remind and prepare your client on the premium audit.  

Non- compliance of premium audit might result in charge up to 200% of annual premium estimation or policy cancellation.    

Ask clients to talk to auditors about daily operations. This way, employees have a proper analysis of each designation.    

Inaccurate tracking of receipts, payroll, overtime, and work expenses can increase premium needlessly.   

Above all, play your cards right to ensure your client gets workers’ compensation insurance and added value with it as well.    

Lastly, remind them that you are always a phone call away.    

Do you have any more recommendations for independent insurance agents to step up their game? Comment below and let us know. 

Learn how you can flourish as an agent after one call!

Schedule a call right now and learn how you can ease your work, sell more, and increase your profits!

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