Awareness of workplace safety is on the rise, but there are still more than 3 million injuries and around 4,000 workplace fatalities in the US every year.
The workers’ compensation insurance market, meanwhile, is currently “healthy, strong, aggressive and profitable,” according to Frank Pennachio, cofounder of Oceanus Partners, a training and consulting firm that provides strategies and support to help customers navigate the changing insurance industry and communicate coherently with clients. But the industry is far from perfect. Far too many employers buy workers’ compensation insurance without really understanding the risks in the system.
Employees find themselves in the workers’ comp system through no fault of their own, Pennachio points out. One accident can land someone in a system plagued with inefficiency and ignorance. A worst-case scenario might involve someone who was injured at work, then sent to the wrong doctor, who inappropriately prescribed opioids, resulting in that patient suffering side effects and later addiction. This sort of train-wreck scenario can easily be avoided with a little education, Pennachio says.
“Agents and brokers need to advise employers and make them aware that there are adverse financial events hiding around every corner,” he says. “One of the challenges employers face is helping employees get the best medical care if they get injured.”
Selling workers’ compensation insurance based on price is an “exceedingly fl awed and harmful” way of doing business, according to Pennachio. A broker who merely sells a policy without addressing key issues employers are facing is providing poor overall service, he adds.
A potential cause of such industry complacency is the fact that workers’ compensation insurance is a mandatory purchase in the US, says Susan Toussaint, cofounder at Oceanus Partners.
“Many people don’t understand the real opportunity there is to help employers make better and more informed decisions around accurately programing workers’ compensation policies,” Toussaint says. “Some people think that because it’s a mandatory coverage, there’s no opportunity to make an impact – but nothing could be further from the truth.”
A lot of headway has been made in the industry over the last 10 years, but there is still a culture of abdication in the workers’ compensation market, Toussaint says. Too often, nobody takes the initiative to embed better business practice – but this is where brokers can and should step in.
“The best agents and brokers have found room as the willing partner between the employee, employer and the insurer,” Toussaint says. “They become that conduit of information and knowledge between the employer and the insurance company, building a relationship that will only benefit both parties.”
