Experiencing a workers’ compensation claim significantly influences small business owner confidence in their insurance program, shifting their focus from price to safety and risk management, according to a survey by The Hanover Insurance Group, Inc.

The study found that small businesses without any claims prioritize price as the top consideration when purchasing workers’ compensation insurance. However, for those with at least one claim, the focus shifts towards risk management services and claims handling. Specifically, 60% of small business owners without a claim rank price as a key factor, while only 40% of those with more than one claim do the same.

Interestingly, the more claims a small business owner has experienced, the greater the value they place on risk management and claims. Among businesses that have had claims, 45% rate risk management services as one of the top two considerations.

The survey also highlighted the role of insurance agents, with over two-thirds of small business owners considering their recommendation as a crucial factor when purchasing workers’ compensation insurance. This suggests a clear opportunity for agents to discuss value beyond price with their customers, especially before they experience a claim.

Despite 94% of small business owners believing they have a strong safety culture, and 89% being confident in their proactive measures to keep employees safe, the survey data indicates a lack of a comprehensive approach to proactive measures. This suggests that small business owners need additional risk mitigation resources that go beyond regular trainings. Hanover points to workplace hazard assessments, business continuity planning, nurse triage services and telematics-based driver safety monitoring as additional options.

Once a claim occurs, confidence in a business’ safety culture significantly drops. While 70% of small business owners rate their safety culture as “Excellent” when they have never experienced a claim, only 48% of businesses that have faced a claim rate their safety culture so highly.

The survey also found that as small businesses encounter claims, their priorities shift, leading them to adopt a more expansive and holistic approach to risk management. For instance, among small business owners that have had workers’ comp claims, 68% conduct regular inspections and safety audits, 65% have a health and wellness program, and 51% use a nurse triage service.

Overall, while 88% of respondents report they are confident they are adequately insured, there are many factors that small business owners anticipate could impact their workers’ compensation insurance program in the future, including the cost of insurance, an economic downturn, technological advances, and mental health and stress-related claims.

View the full survey results on The Hanover’s website. &

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