By Ray Wise, Senior Vice President and Chief Sales Officer at EMPLOYERS
2020 was a whirlwind year for small businesses. Most businesses ended the year on a much different note than they began. Many are struggling to stay afloat, while others experienced unanticipated growth. These changes, no matter how big or small, impact payroll, and ultimately workers’ compensation insurance coverage.
The beginning of any new year is a perfect time for independent insurance agents to proactively reach out to their policyholders, assess their current business situations and needs, and advise on the right coverage for the year ahead. As we begin 2021, these conversations could make all the difference in the world helping small businesses in “getting to the other side” of the economic impacts that they continue to endure and navigate resulting from the COVID-19 pandemic.
Agents can use the below pointers to help guide these important discussions.
Don’t wait until renewal to pick up the phone to contact clients! Reach out as soon as possible to small business clients. The past year proved plans can change quickly, so be proactive in reaching out to small business clients. If there was ever a time to “shine” for your clients, it is NOW! Your advice could not only help save a business, but help businesses accelerate when we get to the other side of the pandemic. These calls/contacts with clients can be very efficient, quick and impactful and can be done virtually with the right preparation up front.
Adjust for changes in headcount. One of the most important questions agents need to ask is how their clients’ staffing structures changed during the year. For example, during the turmoil of 2020 many small retailers may have reduced their headcount, while grocery stores may have increased it dramatically. Because the amount of workers’ compensation insurance premium a business owes is determined, in part, by its annual payroll, it’s important to gather this information early to avoid any surprises at audit. Agents and their clients should also touch base on expected payroll changes in the upcoming year that can be addressed preemptively.
Changes in operations. Changes in what products or services a small business provides can also affect how its employees are classified. For example, restaurants that may now offer delivery service, that did not before, may have either be subject to classification changes or be viewed differently from either a pricing or underwriting perspective. An Agent plays a vital role in helping guide the client through these changes to minimize any surprises and ensure proper classification and that the client is matched with the right carrier who understands and is comfortable with any exposure changes.
Evaluate business cash flow and appropriate billing plans. Agents should encourage their clients to be candid about how their cash flow was impacted in 2020 and what it may look like moving forward. Gathering clear details on whether the cash flow is steady or fluctuates can help agents make recommendations about payment plans. Policyholders may not realize there are different options available, including a wide range of installment plans as well as “pay-as-you-go” plans. Each option has benefits and drawbacks, so agents should go through each scenario with their clients to determine what best addresses their particular needs.
Explain state-specific rules and regulations. Because each state has different regulations for billing and employee classification, which often change, small business owners may not be up to date on the latest rules. Agents can act as the definitive source of information on any state-specific regulatory nuances that could affect their clients. If a client expanded operations into a new state or hired an employee who works in multiple states, that will need to be communicated and documented so the correct workers’ comp coverage can be applied and legal penalties avoided.
A workers’ compensation insurance agent can be a valuable resource and trusted partner to small business owners, particularly during stressful times. That’s why agents should discuss these topics proactively to help set their clients up for success in the new year. Working together and having these discussions early can make all the difference to the financial health of a small business and help clients start the year on the right foot.
About Ray Wise
Ray Wise joined EMPLOYERS as Senior Vice President, Chief Sales Officer on November 30, 2016. He previously served as President of Vanliner Insurance Company. Prior positions include Chief Sales and Marketing Officer, Business Insurance, for CNA Financial and various positions with The Hartford. Wise holds a BS, Business Administration from Syracuse University.
Ray Wise is Senior Vice President and Chief Sales Officer at EMPLOYERS®, America’s small business insurance specialist®, which offers workers’ compensation insurance and services through Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, and Employers Assurance Company. Not all insurers do business in all jurisdictions. EMPLOYERS® and America’s small business insurance specialist® are registered trademarks of Employers Insurance Company of Nevada. The information provided is intended to provide a general overview. This information is not legal advice and should not be relied on as such. EMPLOYERS® makes no warranties for the accuracy, adequacy, or completeness of the information provided, and will not be responsible for any actions taken based on the information contained herein. If you have legal questions or need legal advice, please consult an attorney. EMPLOYERS®, America’s small business insurance specialist® and EACCESS® are registered trademarks of EIG Services, Inc.