When $1 = $3

When you have a Work Comp claim, there are both hard and soft costs.  The dollars paid by your insurance company will haunt your checkbook for up to 4 years.

The first year is charged against you at renewal when determining your next year's premium.  In years 2, 3 & 4 the losses go against your experience modification AND are still developed by the underwriters.  On average $1 in loss will cost you $3 in future premiums.

The soft costs of lost productivity, morale and added training costs can add another $3.  A local police department is turning away 1/3 of applicants because they can't write a simple paragraph.  How hard are your people to replace and bring up to speed?

Safety matters not just because it is the right thing to do, it makes good business sense as well.

Temps Are People Too...

In my 25 years in the insurance industry, there is one group of employers and employees that have always been treated as second class.  Insurance companies wrongly assume that every staffing firm places 99% of their employees driving forklifts while blindfolded on rooftops.  They also believe all of this payroll is reported under clerical as well.  An underwriter recently told me that client companies only use temp agencies to save money. (Oh the horror of it all!)

Insurance companies also tend to view temps as "those people" who couldn't qualify for a "real job" due to their criminal, drug and educational history.  The misconception that every temp is a day laborer on parol causes legitimate injuries and claims to be overly questioned, treatment delayed and unnecessary litigation.

Not every temp agency is perfect, but neither are every car dealership, bakery and library.  Temp agencies have been able to place people who are looking for jobs into meaningful careers.  One of the best Business Development Managers I know got her start as a temp for a mom & pop insurance agency filing health insurance documents.  I would argue that the Staffing Industry has had a more positive impact on unemployment than both political parties combined.

The labor market is changing.  You could even say it has been "fundamentally transformed".  Staffing firms are providing a very needed means for people to not only get a job, but to get a career.  

So, the next time you see an advertisement or sign for a staffing firm, realize this; they are in the business of getting people to work so they can provide for their families and pay taxes instead of being a drain on the system.

  

To the Staffing Industry I have but two words, "Thank you".

A Sign of Our Times?

While driving with the family today, we came across this sign at a small petting zoo near an apple farm.  Are we really at a point where we have to tell people not to hit, kick or climb on little animals?  I think the answer is yes.

We have to tell employees to wear goggles around equipment.  We have training to remind all that harassment is wrong.  We teach kids to obey the "Golden Rule" but can't tell them the source.

People do wrong and stupid things.  Maybe signs will help, but the need for signage I think is a bigger problem.  Common sense and common decency in the workplace or petting zoo is becoming more rare each year.

So let's be nice to ourselves, co-workers and llamas too; even if we don't see a sign.

How to Raise Your Insurance Premiums (Warning...Sarcasm Ahead)

Just to recap, insurance companies agree to assume specific and finite risks from your company in return for premium dollars.  If you want to double or even triple your premiums, simply increase the real or perceived risk of your operations.

For example, when your insurance company wants to perform a loss control visit, simply put them off.  After the visit occurs, then ignore the 1st, 2nd and 3rd requests for corrective action.

If the WCIRB, NCCI, ISO or any other agency wants to meet with you to learn more about your company, be sure to have a new or possibly disgruntled employee give the tour.  This will guarantee a rate increase.

When a claim does occur, try taking care of it yourself.  Adjusting is easy.  By waiting until you have a court date, the insurance company will have little or no chance of prevailing.

These tactics will raise your rates and may even result in a cancellation.

The above are all too real and all too common.  Your cost of insurance is not determined on your renewal date, but during the other 364 days.  If your risk is not properly managed and communications collapse, your rates are guaranteed to skyrocket.

Who Are You?

What is the number #1 error on insurance policies?  Sadly, it is your name; more specifically your company's name or names.  If you lay all of your insurance policies side by side, you will probably notice that the named insureds may not all match.

If you have active subsidiaries and they are not named on your policy, your insurance company can deny claims brought against those entities.  In fact, getting the named insured wrong is one of the leading causes of E&O suits against insurance agents.

If you purchase or merge with another company, all of your policies need to be amended and in some cases rewritten.  I once reviewed the policies of a large non-profit and the general liability insurance named all five legal entities, but the D&O covered only one.  Had there been a loss, there would have been no coverage.  The policy specified that new entities had to added within 30 days.

You spend thousands of dollars each year for your insurance coverage.  It is important to make sure that your insurance company knows exactly who you are.

A Dynamic World...

Life is dynamic; always changing.  We are either growing our business or shrinking it.  We are either getting fatter or skinnier; richer or poorer.

When I worked for the Federal government, we were sent through defensive driving classes.  We were taught at high speeds how to avoid accidents that occur in front of us; accelerate TOWARD the point of impact.  The reason being that due to the laws of physics, that is the one place the cars are guaranteed not to be once you get there.  This lesson kept a loose 2000 pound jet ski from bouncing through my windshield at 70 MPH just north of San Diego a few years ago.

Our lives are as dynamic as a bouncing jet ski on the highway.  We change, our clients change, our prospects change, our companies change, our markets change, our economies change, our laws change...  I think you get my point.  Instead of making a resolution this year, just be aware of the road ahead.  Ask your self each day if your are headed toward your goals instead of the jet ski.

Happy New Year!