| During the 17th and 18th Centuries, smallpox was the | | | | compensation professionals to assist you to |
| most serious infectious disease in The West and | | | | determine which treatment or combination of |
| accounted for a substantial proportion of deaths, | | | | treatments will work for you in this process. |
| especially among town dwellers. The mortality rate | | | | In a recent submission of a medium-sized staffing |
| varied regionally, with 10% in Europe and 90% in | | | | company, thirteen major carriers were approached |
| America. It is difficult to imagine that smallpox was | | | | and nine immediately declined because they will not |
| once one of the most feared diseases in ancient and | | | | consider staffing companies. Whether this is due to |
| modern history. | | | | insurance treaties with their re-insurers or their |
| After an extensive and successful eradication | | | | impression that the staffing industry is high-risk, it is |
| program, there has not been a single reported case | | | | an unavoidable fact. With only four carriers |
| of smallpox infection in over twenty years. But the | | | | considering the submission, a company's "snapshot" or |
| threat of this deadly disease exists again because of | | | | insurance desirability must be exceptional. It is |
| the small amounts of vaccine available. A preventive | | | | extremely important that you identify your insurance |
| vaccination program to protect individuals such as | | | | desirability prior to submitting your application. |
| emergency and health care personnel is not an option | | | | Following, you will find the article, "Do You Know |
| at this time. | | | | Your Company's Insurance Desirability?" The article |
| Much like the smallpox disease that was once | | | | explains the items that go into the desirability |
| thought to be eliminated, the worker's compensation | | | | quotient. Once you have determined your desirability |
| market has again become a threat as a "company | | | | quotient you can begin to take steps to improve it. |
| killer" after nearly being eradicated in the mid to late | | | | After you have the best desirability quotient that |
| 90's. Since 1998, almost every insurance broker and | | | | you can obtain it is time to go to market. But where |
| company owner was certain that the insurance | | | | you go in the market and who takes you there can |
| market would never be as hard as it was in the late | | | | be just as important as your desirability quotient. |
| 80's and 90's. Never again would companies be faced | | | | Your first question should be "Does my broker really |
| with shutting down their operations because their | | | | know my business and are they motivated to get |
| premiums consumed all of their profits and more. All | | | | me the best possible quote without consideration of |
| the signs of resurgence were there but, much like | | | | commission?" This is not asked to undermine brokers. |
| the blips on the radar at Pearl Harbor, they were | | | | During the soft market, brokers took a beating. |
| ignored. Few prepared themselves for what was to | | | | What you must determine is if are they trying to |
| come, and the effect has been the death of many | | | | make it up this year with your account. It is strongly |
| companies and the irreparable damage to others' | | | | recommended that you have a third party that does |
| bottom line. As of this writing, I am aware of | | | | not benefit from the premium commission review the |
| twenty-one staffing firms that have closed their | | | | process. |
| doors due to the high cost of insurance premiums. | | | | Next, you need to determine the type of program |
| Some companies are limping along trying to survive in | | | | that a) will be offered to you by carriers and b) |
| hopes that the market will ease and the negative | | | | doesn't contain hidden costs that will seriously impact |
| status of their profit and loss statements will once | | | | your finances in years to come. |
| again be positive. It is very unlikely that we will see | | | | Carriers today generally offer only a few programs |
| the soft market of the middle to late 90's for at | | | | to insureds based on the insureds' financial status. It |
| least another two years and probably longer than | | | | is important to know which of these offers is a good |
| that. Many of these companies will fall. | | | | offer. Also there are some programs that appear to |
| So what can a company do to survive this terrible | | | | be a good buy today, but could have devastating |
| ordeal? The choices are limited. A company could | | | | effects on your company in future years. In the |
| increase prices to pass the cost on to the consumer. | | | | following article, we will identify the various types of |
| In most cases this will not work. Clients cannot | | | | insurance programs and the advantages and |
| afford to bear the additional cost of your premium | | | | disadvantages of each. We will also include |
| because the economy is also affecting their bottom | | | | participation requirements of the programs. |
| line. Companies familiar with using temporary staffing | | | | Finally, it is extremely important that you have, |
| firms know how competitive the industry is and they | | | | maintain, and control an effective risk management |
| would probably move their business to another | | | | and safety program. This program must be known |
| supplier that was not impacted by heavy premium | | | | and understood by all of your staff members and |
| increases or they would stop using temporary | | | | there must be clear and precise evidence that is used |
| staffing altogether. Larger national staffing firms will | | | | consistently as a common everyday practice. Owning |
| benefit because they are self-insured, as would those | | | | a manual, attending or conducting a seminar or having |
| companies that chose to move to alternative | | | | only one or two individuals familiar with your program |
| insurance programs a few years ago. These | | | | will not be sufficient to satisfy the underwriter's |
| programs usually require a great deal of upfront | | | | concerns for exposure. Carriers have become more |
| collateralization that most companies cannot afford | | | | alert to the signs of a "surface only" risk |
| today. Those that had the foresight to secure this | | | | management program and will be quick to deny an |
| type of program when profits were high and funds | | | | application or will quote very high if they feel your |
| were available have now satisfied their collateral | | | | program is inadequate. |
| requirements and, from an insurance perspective, are | | | | Time is of the essence. If your renewal for this year |
| benefiting from this hard market. | | | | has not yet occurred, it is very important that you |
| Other survivors are those companies with premiums | | | | begin the process as early as possible. It is highly |
| of $1,000,000 or more. Although they maintain high | | | | recommended that you start at least 90 days in |
| retention levels of $250,000 to $500,000, the excess | | | | advance of renewal but preferably 120 days. Obtain |
| premium costs are reasonable. This is mainly due to | | | | a projection of your future premium and begin |
| the limited exposure to the carrier. | | | | setting aside additional funds. It is unlikely that you will |
| Like in any catastrophe, some will not survive. Others | | | | receive a premium reduction, so be prepared. If you |
| may survive but the scars will remain forever. For | | | | have already renewed and your premium increases |
| those that are willing to put forth the effort, there | | | | are killing your profits, get help now. With the right |
| are steps that can be taken to help survive this | | | | approach, you may be able to take steps to qualify |
| plague. When treating a serious medical problem, | | | | for a more affordable program mid-term by making a |
| experts or specialists are used in the healing process. | | | | few adjustments. The worst action is no action. This |
| It is very important that you consider using worker's | | | | plague will not go away soon. Do something today! |