Articulating certain elements of your workplace health and safety and risk mitigation and management processes could impact your workers’ compensation insurance premiums. Photo: wosunan.
As the end of the financial year draws near and businesses balance their books, one line item often gets renewed on autopilot – and it could be costing you thousands.
In the ACT, where just five insurers are licensed to offer workers’ compensation insurance, it might seem like there’s little point in shopping around. But experts say the differences in pricing, claims handling and customer service can be significant.
“We’ve had circumstances where we have secured premiums of up to 40 per cent lower for clients than what they were able to secure by going direct to an insurer,” Allinsure partner Tate Harris says.
Savings often amount to knowing how to present your business to insurers to set yourself above others in your industry.
“It comes down to the presentation of your business and your ability to provide insurers a level of comfort about how you mitigate, manage workplace injury and approach workplace health and safety,” he says.
At first glance, for businesses with a proven track record of good WHS practices and incident management, workers’ compensation insurance seems easy to arrange. Provide your employee numbers, business activity and estimated wages, and you’ll get a quote.
But what providers won’t explain is that the way you describe and document your risk management can often directly impact your premiums.
“They won’t prompt you to provide that detail,” Tate says. “We deal with workers’ compensation insurance every day. We have relationships in place and understand what insurance companies are looking at when they’re risk profiling employers to land on premiums specifically for workers’ compensation.”
But not all brokers are made equal.
Tate says an experienced broker will dig deeper to help you reduce what for many clients is one of their biggest insurance expenses.
“That includes looking at your health and safety practices, your claims history and how your business has responded to past incidents,” he says.
“In certain cases, they’ll also liaise with other key advisers, like your accountant or lawyer, to present a fuller picture of how your business manages risk.
“If your brokers aren’t doing these things, if all they’re asking for is the basic information, then they are not working to paint your business in the best possible light for insurance providers.”
Allinsure partner Tate Harris says brokers must deep dive into their clients’ WHS practices to ensure they get the best deal in the ACT’s challenging workers’ compensation market. Photo: Michelle Kroll.
Workers’ compensation also works differently across the country’s different jurisdictions, which is why a local presence matters.
Unlike Queensland, Victoria and NSW, workers’ compensation schemes in the ACT are not handled by the state or territory government.
In addition, there is no cap on the amounts injured workers can claim under the ACT common law legislation.
“As such, claims costs in the ACT are significantly higher than the national average,” Tate says.
For these reasons, the ACT’s workers’ compensation insurance has long been seen as a challenging space for employers. With spooked providers exiting the market, competition is scarce; it leaves the remaining players highly selective and risk-averse, and underwriting standards are tougher than in other states.
This makes it critical for ACT businesses to put their best foot forward.
“Generally, that won’t be with a broker based outside the Territory, who might not be across the intricacies of this complex system,” Tate says. “You also can’t bank on them having the necessary relationships with insurers in place to effectively negotiate terms.”
The same applies to businesses that have had the one broker for extended periods.
Tate says while loyalty and strong relationships are appreciated, they must be earned year on year.
“Insurance can be a bit of an afterthought, and the obvious, quick solution might be to stick with what you know, or Google other providers and make a call,” he says.
“If your broker isn’t asking you detailed questions about your business, your WHS and other risk management strategies, they may not be looking after your needs as well as they should.
“Clients with large workers’ compensation premiums, adverse claims histories, or high-risk profiles in particular, need this information.
“If you don’t get the sense that your broker has taken the time to understand the key drivers that paint a real picture of your risk profile, and how to present them to insurers to drive down your premiums, it might be time to move on.”
For more information, contact Allinsure.
