Small Business Owners Shift Priorities to Risk Management After Workers’ Compensation Claim, Survey Finds

Small businesses owners are shifting their priorities from price to risk management after experiencing a workers’ compensation claim, according to a recent survey by The Hanover Insurance Group, Inc. The study found that businesses without any claims prioritize price when purchasing workers’ compensation insurance, but those with claims are focusing more on safety and risk management.

Among small business owners who have had at least one claim, 60% now consider risk management services and claims handling to be key factors in their insurance decisions. This shift in focus becomes even more pronounced as the number of claims increases, with 45% of businesses with multiple claims prioritizing risk management.

The survey also highlighted the importance of insurance agents in guiding small business owners through the insurance purchasing process. Over two-thirds of respondents considered their agent’s recommendation to be a crucial factor in their decision-making.

Despite the majority of small business owners believing they have a strong safety culture and proactive measures in place, the survey revealed a need for additional risk mitigation resources. The Hanover suggests options such as workplace hazard assessments, business continuity planning, nurse triage services, and telematics-based driver safety monitoring.

Interestingly, the survey found that confidence in a business’s safety culture drops significantly after experiencing a claim. While 70% of businesses without claims rated their safety culture as “Excellent,” only 48% of businesses with claims did the same.

As small businesses encounter claims, their approach to risk management becomes more comprehensive. The survey showed that businesses with claims are more likely to conduct regular inspections and safety audits, implement health and wellness programs, and utilize nurse triage services.

Overall, while most small business owners feel adequately insured, they anticipate future challenges such as rising insurance costs, economic downturns, technological advances, and mental health and stress-related claims. The full survey results can be viewed on The Hanover’s website.