August 2022 - Competitive Edge Insurance

Don’t Create Your Own Labor Shortage

in General Business Insurance, High-Risk Insurance, News

Since even before the pandemic, millions of Americans have left their jobs. In fact, we have more than three million fewer Americans participating in the labor force today compared to February of 2020, according to the U.S. Chamber of Commerce.

So, how can you ensure you don’t create your own labor shortage as a business owner? Read on for our best tips.

Create a Strong Company Culture

What are the signs that a business has great company culture? High employee retention, transparent communication, employee benefits, employee recognition, opportunities for development… The list goes on.

But how do you get to this level? To create a strong company culture, you should consider the following:

Determine what this culture looks like
Ask for employee input and LISTEN to what they have to say
Hire for culture
Encourage (and model!) work-life balance
Make sure employees know your expectations regarding culture

Of course, this is a shorthand list of things you can do. Building a strong company culture is crucial to ensuring you maintain the workforce you do have, and don’t create a labor shortage for your own business.

Ensure Your Workplace is Safe

Your workplace, regardless of your industry, needs to be safe. This includes big-ticket items like following any regulations and codes as well as small things like ensuring rugs are adhered to the floor to prevent tripping, for example.

Ensuring your workplace is safe will help increase employee retention and lower your risk of receiving workers’ compensation claims against your business. It’s a win-win.

Read on to learn more about rising workers’ compensation claims and what you can do.

Provide Growth Opportunities for Employees

What opportunities are you providing to help your employees grow? Are you paying for outside training? Seminars they’d like to attend?

Increased employee retention is one of the best benefits of a successful learning and development (L&D) strategy. In fact, according to a LinkedIn study, “94% of employees would stay at a company for longer if the business was investing in their career development.”

Implementing learning and development opportunities for employees can help:

Retain top talent
Increase job satisfaction and morale
Improve productivity, and
Earn more profit…

In fact, research shows that “businesses that have actively interested and dedicated employees see 41 percent lower absenteeism rates, and 17 percent higher productivity.”

Consider: What training and development might your employees benefit from?

Invest in the Right Insurance Coverage

Of course, we wouldn’t be who we are without mentioning insurance. Having the proper coverage for your business makes for safer operations and employees.

Although the types of insurance your business needs vary on a case-by-case basis, most businesses need the following types of coverage at a minimum:

General Liability Insurance
Workers’ Compensation Insurance
Commercial Property Insurance
Cyber Liability Insurance
And more

Read on to learn how much business insurance should cost.

Focus On What Matters Most

Our biggest overarching rule is this: Focus on what matters most. Employee retention is all about making your workforce feel special, valued, and safe. Take some time today to think about how your specific business might achieve this.

Interested in learning more about the labor shortage? Read on to see how the California labor shortage is affecting the construction industry.

Workers’ Compensation Rates are Rising: What Can You Do?

in Construction, General Business Insurance, News, Workers' Compensation

As many business owners may have noticed, workers’ compensation rates are rising. What does this mean? Why is this happening? And most importantly, what can you do as a business owner in response?

Read on to find out.

Why Workers’ Compensation?

If you’re a business owner or an individual who is planning on employing workers when starting a new business, California state law requires you to invest in workers’ compensation insurance.

Why? Employers purchase workers’ compensation insurance to cover the medical costs and lost wages for work-related injuries and illnesses of employees. In turn, workers’ compensation protects your company against employee lawsuits.

Worker’s compensation coverage can help pay for:

Immediate medical costs (i.e. emergency room expenses)
Ongoing medical costs (i.e. physical therapy)
Partial lost wages while the employee is unable to work

Lack of proper coverage can result in fines and even criminal exposure.

Workers’ Compensation Rates Are Rising

Over the past couple of years, workers’ compensation rates have been steadily increasing across the board. They’ve been rising by 7% on average; however, this figure depends on each industry.

Moreover, in July 2022, the Workers’ Compensation Insurance Rating Bureau of California® (WCIRB) submitted its September 1, 2022, pure premium rate filing to the California Department of Insurance (CDI).

The CDI regulates California workers’ compensation rates with the help of the WCIRB, who makes recommendations based on the state’s loss ratio.

In this July 2022 filing, the WCIRB proposed a set of increased premium rates. On average, these rates are 7.6% higher than those approved the year prior on September 1, 2021.

According to the WCIRB, the average of the proposed September 1, 2022, advisory pure premium rates is $1.56 per $100 of payroll.

Read on for the WCIRB filing.

Why Are Workers’ Compensation Rates Rising?

So, why have these premiums been increasing in the first place?

The bottom line is that workers’ compensation rates are rising because there are simply more workers’ comp claims being filed.

Research shows there are many reasons why claims might be increasing, including:

Medical inflation
Workforce changes
The increasing average age of the workforce
Increased indemnity costs, and
Rising wages

Moreover, as individuals have begun to return to work in person, the number of claims regarding health and safety in the workplace has increased as well. These claims typically include:

Employee concerns about exposure to COVID-19 due to unsafe working conditions, or
Situations where employees allege they were wrongfully denied a request for workplace accommodation or leave

What Can Business Owners Do?

With this rise in claims, what can you do to protect yourself as a business owner? You can prevent workers’ comp claims by:

Prioritizing risk mitigation
Maintaining a safe workplace
Supporting mental health awareness to reduce burnout
Emphasizing proper employee training
Developing and distributing an employee handbook and code of ethics policy
Implementing a handbook auditing procedure

While this list only showcases a few of many ways to avoid high workers’ compensation premiums, it’s important to remember that it’s up to all employers collectively to keep their employees safe—thus, lowering the number of claims being filed annually.

How Much Risk Does Your Business Hold?

If writing your hefty workers’ compensation check has begun to pain you, at Competitive Edge Insurance, we challenge you to ask yourself a question: “Am I, as a business owner, doing everything in my power to create the safest workplace possible?”

If the answer is no (which it typically is), get in touch with our team today to learn what else you can do.

Learn more about 2022 workers’ compensation changes by reading our article “Insurance Trends in 2022: What to Watch For.”

Why an Advisor Should Work with an Insurance Broker

in General Business Insurance, News

Wealth advisors who seek the support of an insurance broker not only set themselves up for success but most importantly, they also do so for their clients looking to purchase real estate.

An insurance broker provides a wealth of knowledge to help understand what potential liabilities ensue from the real estate purchase, as well as mitigate risk.

This partnership will help you as an advisor, guide your client to make the best financial decision as well as plan for the future with the guidance of an insurance broker. Let’s dive into why an advisor should work with an insurance broker.

Infographic of Why an Advisor Should Work with an Insurance Broker

Types of Insurance Needed

The right insurance to cover your client’s upcoming real estate purchase depends on a variety of factors.

What kind of real estate is your client purchasing?
Where is the real estate located?
What is the size of the real estate?
What is the purpose of the purchase (personal or for business)?
Is the real estate located in a climate that requires additional coverage (i.e. fire zone, earthquake zone, etc.).
And more

All of these answers will help advisors understand potential additional costs that may go towards insurance coverage (or even potential damage should an unforeseen issue arise).

The different types of insurance policies your client may need for their real estate purchase include:

Homeowner’s insurance
Fire insurance
Flood insurance
Earthquake insurance
The list goes on

The Benefits of Working With an Insurance Broker

An insurance broker can assess the real estate property to see what potential risks the property has. If the piece of real estate is located in a fire zone, the insurance broker can identify what coverage would look like.

Essentially, working with an insurance broker helps list out all of the different insurance possibilities your client needs. Basic homeowners insurance or umbrella insurance may come with exclusions for coverage for fires, floods, etc.

Knowing what additional policies may arise allows you to sit with your client and discuss their financial strategy to help them maintain their goals.

Once you have the full picture from the insurance broker you’ve partnered with, you can then budget appropriately. You then have all of the materials necessary to make sure you can give a holistic overview to your client and tell them, “this is a financially smart decision” or, “let’s find a different route for you.”

The main benefits of working with an insurance broker can be boiled down to these three factors:

You help your client mitigate risk
You save your client money both short term and in the long run
Your client will have better knowledge of the real estate investment they are making
As a broker, you will then understand where you can save your clients money and where they may have to invest more

Read on for more information on risk mitigation.