A recent national survey of restaurant decision-makers finds that they place too much emphasis on the price of their workers’ compensation insurance, potentially forgoing the long-term financial benefits of accident prevention and other loss control measures.
The survey results, released by Reno, Nev.-based Employers Holdings Inc., found that most workers’ compensation insurance decisions are made by restaurant owners themselves (96 percent of the time). The survey also found that price is the key criterion that drives the workers’ compensation decision for 71 percent of restaurant owners and managers — and that restaurants are more likely than other small businesses to switch carriers based on price.
While nearly half of all restaurant survey respondents reported having had at least one costly workers’ compensation claim in the past five years, 61 percent of survey takers who switched carriers at their last renewal switched because of price — and no restaurant owners participating in the survey reported switching carriers to obtain more effective loss control and safety program support.
“Price can logically serve as a deciding factor in many restaurant purchases, but when it comes to workers’ compensation insurance, a carrier’s claims management, financial strength, safety and loss control expertise can bring added value,” noted Martin Welch, president and chief operating officer of Employers Compensation Insurance Co. and Employers Insurance Company of Nevada, insurance subsidiaries of Employers Holdings Inc.
Both the price sensitivity and busy schedules of restaurant owners are recognized by trade groups and industry associations which frequently ally with insurance carriers to offer association members group incentives, industry-specific expertise, and loss control programs. Restaurant decision-makers in the survey weighed their trade group’s recommendation as extremely important (rated 9 or 10 on a 1-10 scale) when they purchase workers’ compensation insurance. Yet despite the importance placed on restaurant association recommendations and potential savings through group incentives, only about 1 in 10 survey-takers reported buying workers’ compensation insurance through an association, the survey indicated.
Employers released survey results on the restaurant industry, obtained through its semi-annual Small Business Market Monitoring Program conducted in collaboration with Profile Marketing Research, Inc., of Lake Worth, Fla. Restaurant industry-specific data was collected through telephone interviews with a representative industry sampling of 107 respondents representing eating places with 5-99 employees. Overall survey results have a +/- 9.47 percent margin of error.
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