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Business Insurance

Insurance Considerations in Uncertain Times

By April 6, 2020April 8th, 2020No Comments

To say we are living in uncertain times is most certainly an understatement. Whether we’re discussing the impact to our economy, the eventual return to a new normal for conducting business, or even something as stoic as the role of a handshake, uncertainty is the common concept. It’s impacting our homes, our businesses, our entire world.

As businesses shelter themselves for the uncertain times, there are several considerations that CxOs, business owners, and risk managers need to examine to help their organization weather this storm.

Review Exposures

  • Mid-Term Revisions – Will your carrier allow for a mid-term revision to sales and payroll exposures? If so, revise exposures to a more accurate estimate to help you manage your cashflows.
  • Renewal Projections – Carefully examine your exposure projections for your upcoming renewal term. How has this slow down impacted your business? How quickly do you expect business to return to normal? What is the new normal?
  • Audit Impact – You estimated your current sales and payrolls in one of the strongest economic environments in our Country’s history. Can you expect a return premium due to overestimated exposures? How will you put this to use?

Payment Terms

  • Current Relief – Many carriers have expressed flexibility to help businesses through these uncertain times. Many carriers have extended grace periods for cancellations due to nonpayment of premiums and are offering premium payment deferrals in order to ensure policy continuity. Familiarize yourself with the payment terms that your carrier is offering.
  • Pay As You Go – Does your workers’ compensation carrier offer a pay as you go option? This will eliminate any fluctuations in premium due to changes in your payroll.
  • Premium Financing – Many McConkey clients gain cash flow flexibility through premium financing arrangements. Weigh the cost of financing against the benefits of greater flexibility.

Impact to Workers’ Compensation Claims

  • Layoffs – Pay close attention to any workers’ compensation claims during times of layoffs. The opportunity to collect a higher income through workers compensation benefits than through unemployment benefits may tempt an employee to submit a fraudulent claim. Typically, these are soft tissue injuries. Monitor claims frequency closely.
  • Layoffs & WC Costs – Layoffs can increase workers’ compensation costs in certain situations. In PA, an injured employee that has returned to work under restrictions, but is subsequently laid off, is entitled to an automatic reinstatement of workers’ compensation benefits.McConkey’s Director of Claims, Ed Tobin Esq. has directed clients to be aware that to the extent they lay off an employee who has 1) an accepted work-injury, and 2) continued medical restrictions connected to that work injury; there is exposure from a workers’ compensation wage loss standpoint. This can be very frustrating for employers.
  • Increased Costs – A lack of physician availability and rescheduled appointments will cause delays in the workers’ compensation system. Delays in treatment will delay improvement, medical release, and return to work.  This will increase both the life and cost of a claim. The use of telemedicine can be an effective tool to help combat the delays in the healthcare system.  Work closely with your claim adjuster to explore alternative treatment options to minimize costs.

By reviewing these insurance considerations, you will best position your business to weather the COVID-19 storm and capitalize as business operations pick up post pandemic. One certainty through all this is your McConkey Insurance & Benefits representative is ready to help you through this unprecedented time. Please reach out if we can be of any assistance.  Be well!

Kurt Gehman, CPCU

Author Kurt Gehman, CPCU

Business Insurance Executive
kgehman@ekmcconkey.com
717-505-3178

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