When assessing a prospect’s risk level, it is important to look at multiple aspects of the business to help you determine whether it would be a good fit for your agency’s overall book of business. This could include evaluating the risk’s business operations, assessing recent workers compensation claims, and reviewing their loss control program(s).
Some classes of business, such as those who manufacture furniture, can be more difficult to review due to the complex nature of the risk’s manufacturing operations and their loss control practices. Still others are less attractive because of their less-than-average loss control practices or the inherent risks associated with their operations.
Things to look at and questions to ask about the business might include:
What has the company’s experience been with workers compensation claims?
- How many workers compensation claims has the company had in the past 5 years?
- Is there a trend in the type of accidents causing the claims?
What do the company records show?
- Review the type of products being manufactured and the wood products manufacturing operations the applicant is engaged in.
- Gather detailed information relative to job functions and crossovers.
- Evaluate the assignment of employees’ workers compensation classifications and their associated payrolls for accuracy.
What is employee retention like at the company?
- Evaluate the turnover rate for employees.
- Is there a different turnover rate for those operating dangerous equipment?
What loss control programs are in place?
- What methods and techniques have been adopted to control risk?
- It is important to utilize risk control services available to help your client identify and manage their exposures. These services can include operation inspections, training, safety videos, and other tools. These tools aim to enhance the company’s safety program which will help reduce workers compensation claims when implemented correctly.
Overall, during your assessment you’ll need to determine the likelihood of workers compensation claims and the possible severity of losses. You’ll need to decide if the business’s operations align with your agency’s book of business appetite.