2020 has been a challenging year for small businesses. During these times of uncertainty, small businesses are looking for ways to help them save money and reduce their costs and cover losses. Having these conversations with your agent or broker can make your workers’ comp policy less of a headache.
Here are four conversations we recommend to have with your agent or broker early on:
1) Tell Them How Your Payroll Has Been Affected
One of the first things small businesses should discuss with their workers’ compensation agents or brokers is how their payroll has been affected by the COVID-19 pandemic.
Payroll plays a major role in determining workers’ comp premium sizes. Insureds with fewer workers pay less in their premiums. If your business has had to lay off or furlough staff, you may have experienced a premium reduction. Examine your payrolls by seeing how it will affect your business in the first six months of the year, or the full year.
2) Know You’re on the Right Billing Plan
Once small businesses have considered the effects the virus could have on their payroll in the coming year, they’ll want to work with agents and brokers to make sure the billing plan for their workers’ comp policy suits their needs.
There are a variety of ways workers’ comp policies can be paid. Insurers offer annual, biannual, quarterly or even pay-as-you-go plans that allow the policy to more accurately reflect payroll.
While there are many different billing plans, the main difference for policyholders will be knowing whether they’re on an annual lump sum or monthly payroll reporting. Monthly payroll reporting options allow small businesses to avoid putting down a large amount of money at once and can help spread the payments out using a schedule that meets the business’ needs.
3) Assess Pandemic Related Operational Changes
Payroll changes may have left businesses with fewer employees, and as a result, they may have employees working in different roles than they held previously. All of these changes could affect a small business’s workers’ comp policy.
Having employees change roles could expose them to new risks and consequently policy rates could increase. If you have people doing different things than they were when you first wrote your workers’ comp policy that could have a material change in rates or exposures.
To make sure that workers who have recently changed positions are covered, businesses should consult with their agents or brokers to make sure everything adheres to existing policy guidelines.
4) What Are the COVID-19 Rules and Regulations in Your State?
In the midst of this complexity, states are adopting ever-changing requirements and regulations to help curb the spread of COVID-19. A lot of these rules and regulations are constantly coming up fast. Small business owners can help guide the conversation with the question, “Is there anything that I should be aware of as a small business owner agent that would affect my workers’ compensation policy?”
In addition to changing COVID restrictions, small businesses that received PPP loans or other forms of government relief may have to meet certain requirements. Small businesses may have a difficult time keeping track of these ever-changing regulations. That’s where an agent or broker can step in to help clarify.
Have These Conversations Early
As the old adage goes, knowledge is power. In that vein, we recommend having these conversations with your workers’ compensation agents or brokers early on in the new year.
Having these conversations right now can help you sort your financials for another year that is likely to be affected by COVID-19.
In these situations, working with an agent or broker specialized in your industry to make sure you have an appropriate billing plan and that your premiums reflect your business’s payroll can be a money-saver.
Contact ProAction Insurance today to have these conversations and see how our COVID safety program resources can help you stay compliant and save money.
