Selecting the Right Company Partner for Workers’ Comp Pays Dividends
First, this article is not about “parting shots.” When I hear this expression I immediately think of a retaliatory barrage to a poor unsuspecting sole. Instead, I’m going to discuss an issue near and dear to my heart—that of our professional responsibility to take care of our clients by selecting the appropriate carriers to meet their needs and in the process recognize that insurance is more about building partners than selling a policy.
This issue came to mind recently while I was conducting an education program for a group of agency professionals. I realized that for many agents, the workers’ compensation policy is the “red-headed step child” of insurance policies. Workers’ compensation has the reputation of not requiring or deserving a lot of attention. Yet, my agency background supports the idea that an agent can do a lot with workers’ compensation. Agents can make a world of difference to their clients, which can spell dividends in opening doors to other lines of coverage—IF, they are indeed taking care of their clients properly by selecting an “insurance partner” for this coverage.
Once financial stability has been determined, there are four areas that I suggest be examined when it comes to selecting a workers’ compensation carrier: (1) Underwriting, (2) Claims, (3) Loss Control, and (4) Technology.
Underwriting
Too many agents today are willing to simply copy the existing workers’ compensation policy and somehow fill in the blanks on the application without really discussing the exposures with their client. Failing to thoroughly review an account at the outset leaves the door open for competitors to take the account away if they are able to identify errors. Accounts can easily be lost if there are classification errors, or if payroll limitations have been ignored resulting in overcharges. When these events occur, the agent loses credibility not only on workers’ compensation but also on other lines.
This is where a carrier can make a difference. Underwriters or staff should be willing to help navigate the workers’ compensation policy through supplemental information or training programs on auditing procedures, promulgation of experience modifiers, and class codes. They should also be willing to discuss classifications and examine experience modification worksheets.
Finding and fixing mistakes on the policy strengthens the client-agent relationship.
Claims
Claim costs normally escalate because the employer doesn’t know what to do when an injury occurs and doesn’t know how to manage the claim afterwards. Agents should assist by providing up-front instructions in the event of an injury or illness. Agents should take the time to review the First Report of Injury and even consider providing a copy of the TWCC Employer Rights and Responsibilities and Injured Worker Rights and Responsibilities documents.
Obviously, a carrier should be committed to cost containment. This can be verified if the insurer employs claims professionals fully trained and experienced in the state’s regulations and guidelines for benefits. The carrier’s team of professionals should be focused on taking care of the injured worker while enlisting every opportunity available to keep costs to a minimum.
Loss control
The most critical question is: Where are the losses coming from? Again, a carrier should employ a committed group of loss control professionals who can assist clients via on-site evaluations and training to ensure they operate in a safe manner. In addition, the company’s loss control professionals should be available to instruct their agents on the state’s mandated loss control program (Extra Hazardous Employer Program), when it applies, and what’s required; to answer questions relating to OSHA; to help in the area of job descriptions for developing return-to-work programs; and to provide sample drug and alcohol programs.
Technology
The final consideration in selecting a carrier is its commitment to technology. In addition to offering online quoting capabilities, the carrier should be offering loss information or claims status capability via an interactive Web site. The organization should be a resource for information, on technology and technical matters.
Workers’ compensation coverage is an untapped gold mine for many agencies. Agents can enhance their clients’ financial position by aligning with the best carrier for the the coverage, and protect their own reputations and credibility at the same time.
Janett Kearbey, CIC, CISR, CPIW, is the director of WC Education and Production for Service Lloyds Insurance Company.