When you think of the retail sector, you might expect to find that it’s a pretty low-hazard segment of workers’ compensation with lower severity of claims compared to other sectors. You might also think that it refers to the retailers you come across during a mall outing, whose workers stock the shelves of clothing or book stores, and stand behind the counter scanning customers’ purchases.
However, AmTrust Financial’s recently released Retail Risk Report 2019 challenges those assumptions.
“In this study, we wanted to focus on basically anything that’s going to be considered a retail segment, so not just the class code 8017 Retail, but also the other class codes,” said AmTrust senior vice president of workers’ compensation strategy Matt Zender. These class codes included hardware shops, meat, fish and poultry sellers, barbershops and beauty salons, as well as many other types of retailers that fall under this umbrella.
For the report, AmTrust examined three years of retail workers’ compensation claims, and the compiled data explored top hazard classes, common injuries, average lost time, as well as loss control trips to help businesses reduce worker injuries.
What the report found was that, in addition to automotive parts and supply shops, the types of businesses listed above landed on the ‘most hazardous classes’ list. When it comes to hardware stores, for example, there are some height exposures with ladders as well as the cutting of lumber and loading heavy supplies on to pallets that exposes workers to risks. For the meat, fish and poultry shops, lacerations and cuts were commonplace.
“In our experience, anytime you’re working with perishable goods, there tends to be claims that can arise just from the pace that you need to work at in that space, as opposed to non-perishable goods,” said Zender.
Key demographic factors also came into play in workers’ comp claims within the retail segment. For one, men are more likely to file injury claims and their claims result in higher payouts, according to the report, likely because a higher percentage of men perform riskier tasks, such as carrying heavy items. In fact, across retail, lifting was the top reported injury type as it accounted for 22% of reported claims and 23% of total payout for the top-10 injury types. The AmTrust report noted that this injury also had the highest total payout at $22 million.
Furthermore, the AmTrust report found that older, experienced workers were injured less frequently, but when they were hurt on the job, their injuries were likely to be more severe with a higher payout.
“As more workers are continuing to work longer, we’re finding that we’re seeing more claims in that space on a percentage basis. If you just looked at the percentage of payroll hours worked, we’re seeing that workers that are over 60 and over 70 are having more claims. That’s not surprising, considering the fact that it’s pretty clear that those workers are expanding the traditional scope of what they do, whereas I’d say 25 years ago, more of that group would either be retired or would be working in more social aspects – as a greeter at Walmart, for example,” explained Zender. “Now, they’re truly working in more functional areas, so we’re seeing more claims.”
AmTrust’s data revealed that the 18 to 30 age group had the highest reported count, but the over-70 group’s claims were about four times more costly.
Whatever the type of injury or age and gender of the employee, a workers’ comp claim can have a significant impact on a retail business.
“People tend to think of this space as having more jobs that are replaceable and temporary, so when somebody is out, it’s not as difficult to replace that job,” said Zender. “And I think that’s a traditional assumption when you think of the retail space, but when you think about how broad retail really is, it’s probably not as accurate because somebody that’s working as a butcher probably has a lot more technical skills than somebody who’s working as a cashier in a Hallmark shop, and those are more difficult to replace.”
Moreover, if someone owns a small retail shop and they have five employees, and one is out because of an injury, that’s a 20% reduction in their workforce, which makes it’s difficult to try and plan a schedule.
“People have to pitch in and you may not be able to find somebody to replace them right away, so it can put a real strain on a business and it’s one of the reasons why AmTrust is so focused on our return to work efforts, where we can get them safely back to work in a functional position as quickly as possible,” said Zender. “That is an effort on both sides of the equation, where some of it is working with the doctor, some of it is working with the injured worker and, frankly, some of it is working with the employer to get them to understand not only the benefits, but also how it works. Some employers that aren’t as familiar with workers’ compensation just want to wait until [the employee is] fully released to return to work with no restriction, and that can complicate the entire workers’ comp process.”
With AmTrust’s experts writing workers’ compensation for small businesses all day long, they’re an important partner for many retail companies.
“We have a quarter of a million policyholders, and we value each of them and we learn from them,” Zender told Insurance Business. “Since we grew up as a firm writing small workers’ comp at our core over the last 20 years, there’s a lot of insights that we’ve gained about what their needs are and how we can shape our offerings to help meet those needs, and it’s been an iterative process where we’ve been able to grow together.”