November 10, 2022
Workers' comp for construction companies is one the most important insurance policies a small business owner can have other their business. This insurance policy pays out a benefit for any work-related injuries or illnesses and protects the business from any potential costly lawsuits.
Selling workers' compensation to a contracting company may sound like a no-brainer. Still, not many clients are well inclined to purchase the policy, especially if they feel like you're just trying to sell them some product.
To help make this information more digestible and to help get your point across, there are a few pain points you should mention. Continue reading below to learn more about creating the right approach when selling workers' comp.
When selling workers' compensation insurance to your clients, it would be best if you mentioned how the policy could protect them from lawsuits. Of course, not every state requires businesses to have workers' compensation insurance, but having the policy active over the company protects your clients from potential lawsuits claiming negligence.
It is best to remind your clients that without workers' compensation coverage, they can't argue that the employee's negligence causes their own injury.
Other arguments are not valid if they don't carry out this policy:
Many small to mid-sized businesses aren't aware of the cost of these lawsuits and how they can affect a company's reputation. Medical bills and attorney costs are expensive and can quickly add up.
The main point of having workers' compensation is to provide a benefit for employees who sustain a work-related injury or sickness. Not only does this make employees feel more valuable when they work for certain businesses, but it also saves the company money. When selling workers' compensation policies to your clients or potential clients, be sure to highlight what this policy covers.
Common medical expenses workers' comp covers:
Reminding your clients to focus more on the benefits of workers' compensation will help them better understand why they need this type of coverage. If your small business owner is looking to attract the right talent, workers' compensation will help bring in the right people. Top businesses or clients who wish to work with small businesses like to see that your clients have the appropriate licenses and insurance policies before working with them.
As you know, policy premiums are based on your client's number of employees, industry, claims history, and payroll. Of course, one single claim won't necessarily result in higher premiums, but the nature of the claim, disability benefits, and resulting medical bills will.
Other factors that affect the cost of workers' compensation policies:
To keep their premiums low, you can remind your clients about regular safety training programs. Creating a safer environment will drive down the amount of claims a business claims, thus driving down the cost of their insurance premiums.
If you have a new small business owner approaching you for a policy, make sure to go over how each company gets rated for a workers' comp policy. Because most policies go off the previous three years of claims history, your newer business owner won't have that.
They should expect to pay a higher premium for the policy until they can produce three years of experience. Be sure to reassure them that this is only temporary, and once they have three years of claims history, they can have their policy reviewed.
The construction industry is very diverse as many people involved in the industry work as independent contractors or operate under a small business model.
While most states that require workers' compensation mandate that employers get this coverage for their workers, it is optional for those who operate independently. If you have a small business owner who hires employees or staff, it is best to recommend that they obtain a policy to protect their business.
In certain situations, getting workers' compensation makes sense for independent contractors, such as working in a high-risk industry. Working in a high-risk industry exposes certain clients to chemicals and manual labor, which can lead to workplace injuries.
In certain states, such as California, workers' comp laws require roofers or other construction workers to have workers' compensation coverage regardless of whether they have employees. So if you have a small business owner who works in construction, be sure to make them aware of the California law, so they aren't out of compliance.
Many small business owners who operate as independent contractors may come across businesses that will only work with them if they have workers' compensation. This limits the other business' liability if the solopreneur gets hurt while on the job.
When you have a client who runs their own business without employees helping them, the brunt of the work ultimately falls on them. This means that if they were to get hurt, they would have no one else to take care of their clients or complete their tasks.
If they have no one working under them, they don't get paid. Another excellent selling point is letting your client know that the workers' compensation offers replacement income if they get hurt on the job.
Although workers' compensation coverage is well known for paying out a benefit while employees are out of work, some insurers offer a return to work program. This can be very attractive for many small business owners who need their employees back in the workforce to complete their contracts.
Depending on the type of work your clients do, they can use several different return-to-work programs to keep their business running. For example, employees can do all kinds of odd jobs while staying at home. For example, they can file paperwork or answer emails before returning to the field.
As an agent, you probably already know several reasons why people object to buying certain insurance products. Your prospective clients may not necessarily trust you, they may not be able to afford what you're offering, or they may not thoroughly understand what it is that you're offering.
It is easy to assume that your business owner has a basic understanding of workers' compensation, but most clients don't. In reality, most business owners are too preoccupied with other aspects of their business that they don't have time to understand their insurance needs.
This is where your expertise comes into play. Most business owners settle with the first or second insurance offering without fully understanding the insurance needs of their business.
Many of these business owners realize they have inadequate insurance when it is too late. For example, most business owners think the coverage they purchase is enough until one of their employees suffers a severe injury or death.
As mentioned earlier, most prospective clients come to you either ready to learn or skeptical of your offer. They may not trust what you're offering, especially if you come across as too pushy.
When selling them a workers' compensation policy, be open and honest about your product and the potential pricing. Be sure to provide your potential client with a lot of helpful information without being too pushy for the sale.
Above all else, be patient with your clients. Your exact approach will depend on how you assess the requirements of their business.
If you're dealing with a contracting company that operates as a solopreneur, don't be afraid to educate them about workers' compensation. The second they hire their first employee, they will be coming right back to you for a policy.
Selling your clients on the many excellent benefits of workers' comp for construction can help them make the best decision for themselves and their business. Workers' compensation can not only provide your client's employees with a medical expense benefit when they get hurt on the job, but it also protects them from any work-related injury lawsuits.
When you approach your clients as an educator, not someone just trying to sell them a policy, they will be more inclined to work with you. If you write workers' compensation insurance, be sure to add Normandy Insurance Company to your portfolio of options. Our team is here to answer any questions you may have.