Take Note…

WORKERS’ COMPENSATION INSURANCE - A BUSINESS OWNERS OVERVIEW 

Do I need workers’ comp insurance for my business? If you have employees you do.  We’ll help you to understand this complex but important topic and provide some helpful tips all buyers can use.

WHAT IS WORKERS’ COMP?

In a few words, injuries and occupational diseases to employees arising out of and in the course of employment are covered.  Medical costs, wage replacement, permanent impairment benefits, rehabilitation benefits, and survivor benefits are provided.  It is a no fault system, in other words negligence on the employer does not need to be established for payment to commence to the employee. 

WHO NEEDS IT?

Generally speaking, if you have employees, coverage is required.  Sole proprietors and owner partners aren't required to purchase workers' compensation until they have employees.   It is important to note, rules vary from state to state and may change over time.  Check with your state's insurance regulatory agency to be sure of the rules for your state jurisdiction.

FAILURE TO OBTAIN COVERAGE

Penalties vary from state to state and non-compliance is taken very seriously by state regulators.  Many states have enacted workers’ comp “SWAT” teams to seek out violators.  In some states penalties can be the greater of $1,000 or three times the premium that would have been paid.  Injunctions and criminal sanctions can also be imposed.

Should a claim occur during the non-coverage period, the employer would also lose the “exclusive remedy” position and be subject to other potential legal liability.

HOW IS MY PREMIUM DETERMINED?

Standard rates are established by state by business classification type.  Standard rates are multiplied by payroll to determine standard premium.  Actual loss experience is then used to calculate an experience modification factor which is a statistical rating used to modify your individual business rates as compared with industry average.  Simply put, if your experience mod is .90, your standard rate is adjusted downward by 10%.  If your mod is 1.20, your standard rate would be surcharged 20%.  Insurance providers may offer additional premium reductions based upon your loss experience as well as the size of your premium.

CAN I REDUCE MY PREMIUM?

By adopting an aggressive safety and loss control program, you will position yourself to improve your experience mod over time, improve employee awareness of workplace safety and reduce your future premiums.  Organized and documented safety programs may also qualify you for a premium discount (depending upon your state regs).

Furthermore, with the relative “softness” of the insurance market you may find better premium terms and conditions from other insurance companies.  In short, it is a great time to shop.

OTHER BUSINESS OWNER TIPS

Now that you know the fundamental structure behind workers’ compensation, here are a few practical tips to help you in this area:

1.       Select an insurance agent who is very knowledgeable in the workers’ comp area and has influence with the insurance carriers presented. Your agent is your advocate. You don’t want to go it alone on important issues.

2.       Selecting a financially strong “A” rated carrier by A.M. Best rating service is always a smart choice. Unrated carriers may be cheap but will they be there when you are faced with a claim?

3.       Changing your insurance may save premium dollars but should not be done annually.  This practice may appear prudent but longevity with your insurance carrier can pay off when your agent needs some leverage to mitigate a large rate increase or help secure a favorable decision on a potential claim.

4.       Embrace safety and loss control – it pays big dividends.  If you have a claim – stay on top of it!

Repeat After Me…Change is Good!

The phrases “new and different” and “new and improved” are as common as can be.  Usually people view them in a positive manner.  New this, improve that…all sounds great right? Many times these words do provide hope for better times to come. 

When it comes to prospects, customers and other business relationships the issue with new and improved is that the concept also starts them down a path toward change.  Change is scary, change is slow, change is inefficient, change is more work, change is expensive, change is…well, change!  January 1^st is only weeks away and marks the biggest single day of change for any given year.   Are you ready to guide your clients and prospects through change this New Year? How do we get them over the change hurdle? Start here: 

Wipe the slate clean, create a comprehensive change process, and make it adaptable.  Build your process with the prospects’ business disruption and hurdles in mind.  If you anticipate their potential disruptions and engineer a solution into your plan prior to your engagement with them, then your path to sales success and your prospects’ path to this new and improved change will be much easier, smoother, and more likely.

Change is the theme of the payroll business at year end.  What you may not know is January 1^st is also the most popular date of the year for workers’ compensation policies to be renewed.  Opportunity knocks!  Now is the time to provide more value by moving a prospect or customer from a traditional workers’ comp policy to a pay-as-you-go workers’ comp program.  Do you have this built into your change plan? It can be done quickly, it can be done easily, and with little or no disruption to your client or prospect.

Easily? No disruption? How can this be? Intego has built a step-by-step process to make this happen.  We practice it every day.  It doesn’t matter if they have a pay-as-you-go workers’ comp policy already or not.  Your customer or prospect not be disrupted and your efforts will be minimal as well.  When this happens, the benefits of the change will be clear.  Here’s a side-by-side of the benefits to the customer:

With a solid process built and companies all over the United States ready to change their insurance why not take advantage of value add available to you right now?

Client Testimonials…

“At first I didn’t know what to expect but it couldn't be going any better with you than it is.   Jen Vienna is a life saver and the payroll remittance process is the simplest we've ever seen.”

Greg B, Naples, FL  (payroll service bureau partner)

Industry Speak…

Chartis partners with Intego Insurance Services to provide a better workers’ compensation insurance to more U.S. businesses

December 1, 2009 — Rochester, NY — Intego Insurance Services, LLC a leading provider of workers’ compensation insurance, today announced a new partnership with Chartis (an AIG company).  Intego is a distributor of zero premium down-payment workers’ compensation insurance products from the nation’s best insurance companies.  

The new partnership will allow more businesses to benefit Intego’s integrated payroll solution, SMARTCOMP^SM.  Businesses all over the United States can participate in the program. 

Traditionally, businesses have had only one way to pay their workers' compensation premium: up front and based on an educated guess -- not exactly a payment strategy most smart business owners would advocate.  Rather than paying estimated premiums based on projected payroll for a coming year, SMARTCOMP^SM calculates exactly what customers owe based on actual payroll. And instead of making hefty down payments and writing separate premium checks to the insurance company throughout the year, SMARTCOMP^SM provides Intego customers with electronic debit all in coordination with their regular payroll provider.

Intego CEO Robert McBurney states, “Our partnership with Chartis will expand our current capability to provide a superior workers’ comp product to more businesses. The Intego SMARTCOMP^SM program will bolster both Chartis’ and our own ability to serve businesses by easing their paperwork, improving cash flow, and providing them with a consistent payment strategy.”

Chartis is headquartered in New York, NY and provides commercial insurance and services to businesses in the United States and across the globe. For more information go to their website at www.chartisinsurance.com.  Intego is a full-service retail insurance agency headquartered in Rochester, NY with additional offices in Boston, MA.   Contact Intego at (888) 289-2939 or learn more at www.integoinsurance.com.

Details: Contact Intego Insurance Services Business Development National Director Mark Benotti, (585) 214-8513, mbenotti@integoinsurance.com

Web site: www. Integoinsurance.com

Interesting Tidbit…

 “Sales Success in a Nutshell:  Find out what people want and give them more of it.  Find out what people don’t want, and then don’t give them any of that.  How do you find out what people want and don’t want? Ask them.  It’s amazing what you can find out if you only ask.”  - Larry Winget

“The most important thing in communication is to hear what isn’t being said.” – Peter Drucker