Carriers Appetites

Carriers Appetites change dramatically from year to year. This goes mostly for different industries, but it can also apply to different coverages as well. For business owners looking for coverage this can be a frustrating and puzzling part of their insurance experience. They are simply trying to obtain proper coverage for their business. Depending on many things external to the business, carriers may change how much they desire certain coverages and industries.  The prices businesses pay for coverage changes accordingly. The main way to navigate this issue is to partner with an agent you trust and an agent who works with many different carriers.


When carriers change their appetite for your industry or the coverage you need, it is because they are looking for their ideal client. Carriers want to make it as appealing as possible for those clients to purchase coverage from them and they want to make it less appealing for clients they deem a higher risk.  Industries with high risk tend to pay more and struggle to find coverage while industries that carriers have a stronger appetite for are typically ones that have high premium and tend to have a low rate of claims.

In most cases, carriers are willing to be more aggressive with credits and discounts when your business is in one of these low risk industries.


If you are in a high risk industry don’t worry. There are some things you can do to combat the lack of appetite carriers may have for covering your business. First and foremost, you should find an insurance agent who partners with many different carriers and not one or a select few. This way they can shop around to find a carrier who does have an appetite for your industry.  If your agent partners with one carrier or a select few, they may not be able to find the carrier who has an appetite for your industry. There are a lot of carriers who like to find a niche where they can offer to one industry and do it well. Because of this, these niche carriers may have an appetite for your industry where a major carrier will steer clear of those risky industries.

This is common in trucking and construction industries. These industries typically are a higher risk. Any business that has employees driving tend to have more claims and the claims tend to be higher cost. Because of this, some carriers specialize in these industries because they believe they can offer expertise in this niche industry where a larger carrier just does not have the time or the desire to take a risk on covering these businesses. This may be true of certain coverages too. For example, flood insurance is a coverage that is only needed in certain parts of the country. When their is a flood in an area there are typically a lot of claims within a short period of time. Some carriers jump out of the market for a few years when this occurs. Some carriers jump in, in an attempt to capitalize on these areas.

The most important thing any small business owner can do to insure their business properly is to partner with an independent agent who partners with as many carriers as possible. This will allow them to shop around for you in an attempt to find those carriers who do have an appetite for your industry. Any time you see a spike in premium you should speak with your agent about other carriers who may offer more aggressive credits or discounts. If the agent partners with many carriers they should have good knowledge of which carriers do have an appetite for your industry and they are able to leverage that to get your business better coverage and the lowest rates possible.

Workers Compensation Insurance Expert

Personally, I have written workers compensation insurance across the U.S. for 10 years. I have partnered with multiple industries and multiple insurance providers. While doing this I have realized the difficulty and importance of finding an insurance agent that specializes in this line of insurance.  Especially finding an expert who has a positive relationship with the underwriters they work with. For most business owners, Workers Compensation Insurance is one of their biggest insurance expenses. It can be a nightmare to find if the business experiences’ a substantial change in payroll, or if the business has claims or a bad audit experience.   Most insurance agents do not specialize in workers compensation insurance and because this they do not fully understand how it operates.  Therefore, these agents do not want to jeopardize their relationship with their client and potentially lose the other lines of insurance such as general liability or auto by giving bad advice.

While speaking with business owners about workers compensation insurance I feel it’s important to explain the process of how the policy works. I attempt to explain what a classification code is, what the rate per $100 means and how uninsured and insured 1099’s are handled by the audit process.  I do this in an attempt to help the business owner understand how the policy can change throughout the policy term. After the audit is completed, most workers compensation policies change in total pricing after the policy period expires. Since the policy is audited following each policy term it’s important for the business owner to understand the potential changes that could have a significant financial impact on their pocketbook. Do you want to work with an agent that doesn’t take the time to explain these potential changes to you?

When working with a workers compensation expert, the agent will be able to determine or research the correct workers compensation classification code. The correct workers compensation code determines the businesses pricing for workers comp insurance, it’s the most important first step in the process. After the classification code is determined the agent should explain the importance of estimating your employee wages correctly at the beginning of the policy due to the audit. If a business uses 1099 labor, it’s important for the agent to explain how that 1099 is either added or excluded from the business owners audit. After the policy period expires and the audit takes place, it’s important for the agency to be able to explain why the audit resulted in the way it did OR be able to help with disputing the audit.   Business owners can typically accomplish this with the insurance company directly, however, I feel it’s important for your insurance agent to be able to review, educate and assist with correcting after an audit is finished.

One component that most business owners do not understand about insurance quotes is the relationship between the agent and the insurance company is very important. If the agents relationship with the insurance company is untrustworthy, it could cause the insurance underwriter to decline instead of quoting because they don’t trust the information given by the agent. If the agent doesn’t specialize in workers compensation insurance, it’s possible the agent is not providing the relevant information to the underwriter. It’s important to make the underwriter feel comfortable with the business they are reviewing before they are willing to quote, especially when it’s a more difficult or unfamiliar industry. Loss ratio of the clients that agent has insured with an insurance provider is extremely important. If an agency continues to insure bad businesses with an insurance company, suffering bad losses or them finding dishonest information at audit, that insurance underwriter will be less likely to quote for that agent and will not be as aggressive with pricing.

Work with an expert when trying to find optimal pricing for workers compensation insurance. Not only will an expert know how to explain and assist but they will have the relationships established with insurance providers that will give you the most competitive pricing.

8 interview questions that could cause an EPLI Claim.

When interviewing candidates for an open position there is a lot of information a hiring manager is trying to find out about an applicant. No matter what industry you are hiring for nothing is more important than a good fit. Personality and communication skills go a long way towards determining if someone is a good fit for your agency. As you are narrowing your search to a few good candidates, more personal questions seem like the way to go about finding out if one candidate can rise up above the other. Making sure your hiring managers know what is and what is not acceptable can save your business from the damages of an EPLI Claim.

EPLI stands for Employment Practices Liability Insurance. This is an insurance policy that covers a business from the legal costs that arise from lawsuits related to the employment process. The coverage can include lawsuits that result from issues with hiring, firing and harassment in the workplace. These types of lawsuits have been on the rise for more than two decades. For this reason it is extremely important for hiring managers to be crystal clear what they can and what they cannot ask in an interview.

Here are 8 examples of questions to never ask when going through the hiring process.

  • What is your religious affiliation?
  • What is your ethnicity (or race, or color)?
  • How old are you?
  • Are you married?
  • Do you drink (or smoke) socially?
  • Do you have children or plan to?
  • Are you pregnant?


What is your religious affiliation, may seem like an innocent question until you ask it to someone who may take offense to it. Many people are religious and the hiring manager may bring up a question like this just as a way to relate to someone on a personal level. No matter what your intentions are with asking questions about religion it is always best to keep them out of the workplace.

What is your ethnicity (or race, or color), is never an appropriate question to ask. In 2016 it is very likely that a hiring manager will interview an international person at some point in time.  Even a question as simple as what country are you were you born can be misunderstood. It should not be brought up in any way shape or form.

Age is not a question that can be asked in the hiring process. Regardless of whether the person in question is young or old, bringing up age is not an acceptable part of any job interview. EPLI Lawsuits in relation to age are one of the most common forms of lawsuits filed.

A persons Marital status is not an acceptable question to be a part of the hiring process. As long as a person shows up and is able to do the job they are being hired for their marital status has nothing to do with their relationship with their employer.

Questions about lifestyle choices are not allowed in the hiring process. The most common place where this becomes an issue is asking about peoples habits in relation to drinking and smoking. after the hiring process this can only be an issue if there is reason to believe the person is coming to work under the influence or that the employees drinking or smoking habits are interfering with their performance at work.

Asking about children and if a candidate plans to have children is a slippery slope. In many cases this is just simple water cooler talk among people in their 20’s and 30’s. If a hiring manager has a child they may find that asking about family members or children is a normal part of daily conversation because they dominate so much of their life. This may be an issue the potential employee has a problem with. If the candidate is trying to have children, but can’t this may be a stressful personal question they are not comfortable talking about. It has the potential to be interpreted in the wrong manner no matter how innocent the question is. These types of questions are best to always be kept off the table.

With todays’ litigious society, the chances you will face an EPLI Lawsuit go up every year you stay in business. The smaller the business and the longer the employee has been with only make the damage more severe when a claim does occur. Small businesses today are beginning to purchase this coverage more often, but still a majority of businesses with less than 100 employees still choose not to purchase this coverage. This is a decision that can save them a few hundred dollars per year on the front end, but when a lawsuit does happen it may cost them thousands on the back end if the business is not covered.

Should I Buy Workers Comp Insurance Online?

Should you buy workers comp insurance online?

Over the last 10 years or so, more and more insurance providers are starting to show up online. Additionally, even many traditional brick and mortar agencies are at least starting to have a website presence. There are many things to look for in a commercial insurance agent. Among the things that first come to mind are adequately protecting your business from risk of loss, providing well-priced insurance and providing good customer service/being available for customers. Online based insurance providers often perform well at many of the things that are important to insurance buyers, but do they provide the same service?

Online insurance providers are typically high volume agencies. That can benefit customers in a number of ways. First, many of these online providers have access to many different insurance carriers which can allow substantial price shopping. Additionally, due to having a high volume, these online providers generally have good relationships with numerous insurance carriers. Those relationships can often be leveraged to benefit clients when appropriate. Furthermore, due to volume, the online providers often have substantial experience and expertise in the coverages they are offering.

Another advantage of online insurance providers is that they tend to be consistently available during business hours. It is often the case that traditional agencies may be more involved in your community and you may not meet your online provider face to face. However, due to their business model, online providers are typically available in their office during most business hours, which generally allows customer needs to be met promptly. Additionally, online providers are typically licensed in all states, so they are generally set-up to help if out of state insurance needs arise.

With workers’ comp insurance, most of the benefits are determined by statute/laws in particular states. Thus, if a reputable carrier is used and information and business information is fully disclosed, most business owners should be able to be confident that their business is adequately protected by the insurance they purchase. With other lines of insurance, like general liability and professional liability, it is possibly more important to establish a level of trust with your insurance provider. It is important to make sure your business information is reviewed, so that coverage gaps can be analyzed to make sure your business is protected. Establishing this level of trust can often be done over the phone as well as it can be done in person.

Another thing to consider is that online insurance providers may be more closely aligned with the direction of the insurance industry. Many insurance carriers are continuing to develop more and more technology. Online insurance providers are generally also tech savvy. They focus on technology development and utilization. Online agencies may be better able to pass on carrier technology to their clients, while also providing their own technology to clients.  All of this is designed to make issues related to business insurance more efficient for you the business owner.

There are numerous reasons it may be beneficial to consider buying workers’ comp and other business insurance online. Prices are often very competitive. Online providers are generally available for customers and generally have substantial expertise in the insurance products they provide. Additionally, online providers are typically among the most tech savvy agencies in the industry, which is in line with marketplace trends and benefits customers. There are many things to consider in choosing an insurance provider, but online providers stack up well in many factors which are typically considered.

Have employees travelling? Do you know what kind of insurance you need?

Many businesses have employees who travel regularly as part of their job.  This is a part of many industries that can open up new markets and help to keep important clients happy. Nothing can replace meeting with someone for a firm handshake and a smile. With this travelling brings on a diverse amount of risk that your business is taking on. Your business should have written policies in place for how to protect company information while employees are travelling. Here are some things to consider:


  • Are your employees flying or driving?
  • Is the car being driven an employee owned vehicle, a company vehicle or a rented vehicle?
  • Are the employees taking a company laptop, tablet or other computer device?
  • Are all of your insurance policies still in place when the employee is out of state?
  • Is the employee coming home immediately after business is done. If not, policies need to be clear when they are on company time and when they are off.


Here is a list of policies to consider when having employees travel as part of their job. It is also always a good idea to consult your agent or insurance professional about the risks you may be taking.


Hired and Non-owned Auto Insurance –  Hired and non-owned auto insurance is commonly added as an endorsement onto a commercial auto insurance policy. The endorsement adds additional coverages for the insured for an automobile accident involving a vehicle they don’t directly insure.


Commercial Auto –  Commercial auto insurance for company vehicles is an important aspect of any business insurance program. This coverage provides protection against physical damage and injury resulting from car accidents. It should also provide some protection from theft and vandalism.


Workers’ Compensation –  Depending on where your employees are travelling to you may need to check with your insurance agent or carrier to make sure your employees are covered underneath your workers’ compensation policy while they are travelling. The Walsh Test is a good measuring stick to determine where jurisdiction will be when a workers compensation occurs involving more than one state.


Cyber Liability Insurance –  Cyber Liability Insurance, also known as Data Breach Coverage is coverage for your business from the intentional or accidental release of secure information to an unsecured environment.  A breach is typically a single incident where confidential, or protected information, is either viewed, copied, or stolen by someone not authorized to have access to the data.  You need to have a strict company policy in place for how you will safeguard company and client information while the employee is travelling.


Construction Industry

Why is Workers Compensation Insurance so difficult to purchase?

The construction industry in general is very difficult to locate multiple options when quoting workers compensation insurance.  A large majority of workers compensation providers do not have an appetite for small construction or high hazard construction businesses.  These insurance companies feel the construction industry suffers too frequent and severe claims.  Therefore, a lot of construction businesses default to the appropriate state fund or assigned risk pool for workers compensation coverage.  The state fund or assigned risk is the most expensive option with the least flexible payment plan.  It is simply not the best option.  The state fund, also known as the pool or assigned risk, often becomes the only option for small businesses with a high risk and a low amount of revenue.  When businesses travel into other states to perform work, there are additional difficulties if they are insured through a state workers compensation fund. In most cases this creates a gap in coverage when the employees are working out of state.  Several state workers compensation funds do not extend coverage outside of that state.  It’s best for business owners to contact their agent or the insurance provider to verify if coverage extends to the job site that is outside of the state boundaries.

Multiple Tools used for Construction sitting organized on a brown wooden table.

Factors that cause difficulty for the construction industry to find workers compensation insurance quotes:

  1. General Construction Services – not specializing in 1 or 2 specific trades. When a business does the same trade everyday the chances of a workers compensation claim is less likely.  Construction businesses that perform multiple trades are more difficult to find multiple workers compensation solutions for.
  1. Heights – historically workers compensation claims pay out considerably more when an employee falls from a height above 15 feet.  Most workers compensation insurance carriers limit heights to 15 feet.  Any heights slightly above 15 feet must show proper safety precautions taken.  Business owners that require proper safety equipment to be attached and written procedures in-place for the underwriter to review generally are given more competitive options.   It’s important for your insurance agent to give the proper information to the insurance company underwriter so they have a clear and comfortable picture.  Most insurance agents do not take the time to gather the right information therefore the underwriter doesn’t feel comfortable and declines to offer coverage.
  1. Unstable Industry – when the U.S. economy fell in mid-2000’s, the construction industry suffered the most. Workers Compensation insurance carriers who insure construction businesses suffered claims combined with reduced premiums paid by employers due to fewer employees.  Insurance companies must be able to somewhat predict the amount of money they are collecting for each risk they insure.  Businesses that produce a consistent payroll are easier to predict, businesses that process payroll randomly throughout the year are not, therefore less likely to have multiple insurance companies willing to quote.
  1. Sub-contractors or 1099’s – construction businesses commonly use 1099 or sub-contract labor.  Businesses do not specialize in some construction services that are connected to a job therefore must sub-contract to another business that does specialize in that service.  The use of 1099 sub-contractors in this way is acceptable by most insurance providers as long as the business owner is collecting a workers compensation certificate of insurance from the sub-contractor.  Businesses that choose to pay their labor by 1099 instead of w-4 are viewed negatively by workers compensation providers.  Most workers compensation providers have a very limited appetite for businesses that use a significant amount of 1099 labor.  If a sub-contractor fails to pay their workers compensation premiums and the General Contractor is not aware their policy cancelled, most likely the General Contractor’s workers compensation policy will be required to cover the claim.   Therefore, Workers Compensation providers do NOT like a large sub-contractor or 1099 exposure even if certificates of insurance are collected.



How to properly prepare for a Pay as You Go Workers Compensation Audit

Pay as you Go Workers Compensation Audit

Get the best information about a Pay as You Go Workers Compensation Audit at

Workers Compensation Insurance policies require an annual payroll audit to be completed. The purpose of the audit is to verify payrolls for the policy period, confirm operations (class codes) and to check for 1099 sub-contract labor. 1099 sub-contract labor can be added to your audit if they are uninsured. In order to exclude a 1099 from your workers compensation audit, they must meet the standards for an independent contractor and must provide a valid workers compensation certificate or state approved exemption. The workers compensation auditor will typically contact you by mail or phone to set-up a time to gather the necessary payroll related documents. There is typically a small period of time to complete the audit otherwise it’s submitted as non-productive. When the audit is non-productive the insurance company produces an “estimated audit” that increases payrolls over the original estimate and a notice of cancellation. The business owner then has to “reopen” the audit and complete within the time frame determined by the cancellation date. If the audit remains non-productive and the policy cancels, the insurance company then reports to the workers compensation bureau. Due to the unproductive audit the workers compensation bureau can prevent coverage from being purchased for that business until the audit is completed.

Typical payroll documents that are provided to the auditor includes the 941’s or Quarterly Tax Reports for the nearest 4 quarters of your policy period. Most policy periods do not work perfectly with the start of a new quarter, therefore, auditors collect the closest quarterly tax reports and commonly use a Payroll Summary for the exact time period to verify payrolls. Most auditors are not familiar with the Pay as you Go model, therefore they audit using the traditional method only, using the Quarterly Tax Reports. The use of the payroll summary for the exact time period is VERY IMPORTANT for the Pay as you Go billing option. Since the business owner is paying premiums based on actual payrolls it’s important to provide the payroll summary for the exact time period. It’s important for the business owner to communicate the need to use the payroll summary for the exact time period at time of audit. After the audit is completed the insurance company will generate a document that shows the payrolls used to complete the audit. If those payroll figures do not match to your payroll summary report either contact your agent for assistance to dispute OR the insurance company. Explain that your billing is Pay as you Go and the auditor’s results do not match your payroll summary.

In addition to payrolls, the auditor is confirming the employees classification is correct. For most businesses all employees belong in 1 of 3 classification codes. Each industry has a workers compensation code that is assigned.   Some employees belong to a classification code that is not included in the main code OR their hazard is minimal, therefore classified separately. If an employee is performing job duties that belong in multiple workers compensation codes, typically those wages are either classified to the highest rated exposure or divided between multiple exposures. In order to separate payrolls, the business owner has to provide the auditor with verification of the hours worked in each code per employee.   The two best methods for accomplishing this is a payroll system that documents the job description and the hours worked for each employee. Otherwise the business owner will need to use a Log Book to document the jobs and hours worked for each employee to properly separate. The clerical workers compensation code is one of the few codes that cannot be separated with another job duty. Clerical is 100% or nothing.

Liquor Liability Insurance

Get the best answers to your liquor liability insurance questions at

Liquor liability insurance is a coverage that all restaurants, bars, clubs or any establishment that sells alcohol needs to have in place. This coverage is very important because when you sell or serve alcohol you open yourself up to be liable for damages or injuries caused by intoxicated people. These types of damages could include fights, automobile accidents, etc. When we first think of who is at fault the initial reaction is to blame the intoxicated person, but what happens if an accident occurs and someone is severely injured or harassed. The victim or victim’s family may get a lawyer involved and then all of sudden they will look at all the events that led up to the incident. If the establishment played a part in serving a clearly intoxicated person they could be held liable and be sued.

Liquor Liability Insurance is a coverage that protects your business from personal injuries and property damages resulting from a liability lawsuit. The good thing about this coverage, is that it covers the cost to defend. Since legal fees and court cost generally are high even if you are found not to be held liable. One key that you want to make sure of is that assault and battery coverage is included in your liquor liability insurance coverage.  Since this would cover fights that occur at your establishment or if a bouncer handles a situation in an aggressive manner resulting in injury to the person they are making leave. In some policies it will even cover someone that is not involved, but the bouncer pushes through them to get to the fight.

What about Underage drinking? Underage drinking is something that all establishments are aware is illegal. It is very important to check ids, train staff to do so and including training on how to handle fake ids. This is very important because coverage is EXCLUDED for anything resulting from an underage person causing injury or a fatal accident resulting out of drinking at your bar, restaurant, etc. This could essentially put you out of business since you are picking up the entire cost of the incident when it involves a minor who obtained alcohol at your establishment.

Where is this coverage located in my policy or how can I add it? Most states require this coverage if you are serving alcohol at your establishment. Because of this it is an easy coverage to get and it does come at varying levels with different limits of coverage. You can purchase the coverage on a stand-alone basis. This is not always the most cost effective.  Probably the best place to add the coverage is with your general liability or business owners’ insurance policy if at all possible. It is generally cheaper if you package it with those policies. Depending on the % of alcohol sales though you may have to purchase it separate from those. An example of this would be a bar with 100% alcohol sales usually has to purchase separately.

There are companies that specialize in this coverage so it is good to look around before purchasing or when shopping your insurance coverage every few years. You can get this coverage for special events such as weddings, parties, festivals, etc. I recommend contacting your agent or insurance professional for any help.

6 Questions to consider when purchasing Commercial Insurance.

What is the difference between Workers’ Compensation and Employers Liability Insurance when it comes to a commercial insurance policy?

First and foremost, Workers Comp is the one commercial insurance policy that is  required by law in most states. Workers comp covers injuries that happen to your employees that occur as a part of the normal business operations. It pays for medical costs and some lost wages. Typically, 60 percent of the wages are paid depending on the particular plan. Employers liability is a part within a work comp plan that that deals with most types of liability that are not associated with lost wages or medical costs. Most commonly this is the cost of a lawsuit. If you have an employee who is hurt on the job and they sue on top of their workers’ comp coverage for damage caused by you or your business these costs can be covered by an employer’s liability portion of a workers’ compensation insurance policy.

What is one type of insurance that many business owners turn down that they frequently regret when claims occur?

Business loss of income coverage is one that many fail to see the value of unfortunately until it is too late. The most basic example of the need for this coverage is when a fire occurs. The general liability or commercial property policy will cover the cost to rebuild your premise, but they will not pay for lost revenue and employee wages while your business is closed to rebuild. If a business cannot withstand several weeks or a few months without revenue this frequently is when they are forced to close altogether. Fortunately, this coverage is usually a part of a business owners package. When businesses by the package they usually are fully insured for these types of losses.

How does a well-documented safety program effect what I pay for a commercial insurance policy?

The main way safety programs can help is when you are asking for credits or discounts and when you are challenging your experience modifier after a claim. If you have had a claim and you have a well-documented safety program in place your agent can use this as evidence that the occurrence was an outlier and not a sign of more incidents to come.

How does my businesses claims history effect what I pay for Workers’ Compensation Insurance?

Your claims history is part of the formula insurance carriers use to come up with your experience modification rating. This rating determines how much of a risk your business is to insure and it is the main factor carriers take in to account when they are deciding to insure your business or not, as well as how much to charge your business in premium. This and the businesses workers comp codes are the main controllable factors insurance carriers use to determine premium rates.

When should I consider going with Pay as You Go Workers’ Compensation?

Seasonal or cash flow strapped companies benefit best from a Pay as You Go Program. This program allows you to pay a small portion of the premium up front and then the rest is due in monthly installments based on your monthly payroll. It helps to free up cash on the front end of the policy period and it prevents excessive audits on the back end of the policy period.

Where can I go to get help when a claim occurs on my businesses commercial insurance policy?

Actually your carrier is the best person to contact with a claim, but it is always a good idea to keep your agent in the loop as well. Your carrier is set up to handle and process the claim. Ask them for help with a return to work program if you do not already have one in place. Studies show the sooner the worker gets back to work in any capacity the more likely they are to return to work and the claim does not get out of control. Keeping your agent in the loop is great as well because they can go to bat for you in the event the carrier is not satisfying you or your employees needs during the claims process.