Small businesses unknowingly spend workers' compensation dollars

Many small businesses are purchasing workers' compensation insurance coverage without understanding how it works, according to a recent national survey conducted by EMPLOYERS.

The survey found that 14 percent of small businesses could not name their insurer. Thirteen percent do not understand how workers' compensation insurance protects employees with work-related injuries or how it can protect their small business against catastrophic claims.

More than half of the survey respondents dissatisfied with their workers' compensation carriers use state funds. State funds appeal to many small businesses that have little knowledge of workers' compensation insurance.

The most important source for small businesses interested in learning more about workers' compensation coverage is their insurance agent. Seven out of 10 small business owners, partners, presidents and CEOs depend upon their insurance agent to explain workers' compensation coverage and pricing, though 58 percent reported they consider choice of a carrier their sole responsibility.

Seventy-five percent of decision-makers identified price as their primary motivator in choosing coverage, and 69 percent ranked their carrier's financial strength as the second most important factor. Sixty percent named claims handling as important in protecting small business operations in the event of an employee injury.

The Small Business Market Monitoring Program is a semiannual survey measurement of workers' compensation insurance industry trends conducted by EMPLOYERS in collaboration with Profile Marketing Research Inc., of Lake Worth, Fla.

For more information, visit www.employers.com.