Industry IQ: What They Don't Know Can Hurt Them

Most small-business owners don't understand the financial risks involved in obtaining workers' compensation coverage through self-insurance groups, according to a recent national opinion poll conducted by Opinion Research Corp, Princeton, N.J.

Of the 501 Small-Business Owners and Managers Surveyed Nationwide:
85% didn't know about several self-insured groups closing during the past year
58% didn't know that companies in self-insured groups are financially responsible for the claims of all companies in their group
34% knew they could be legally and financially responsible for the entire costs of workers' compensation claims owed by their self-insured group
27% said saving money on workers' comp premiums outweighs the financial risks of belonging to a self-insured group.
"Hard-working small-business owners understandably keep an eye on the costs of their workers' compensation insurance. However, they also need to be fully aware of the risk they are taking when they elect a self-insured group over a strong private carrier," said Martin J. Welch, president and COO for EMPLOYERS, the Reno, Nev.-based group of insurers that commissioned the survey.