When it comes to workers’ compensation insurance, the quality of claims management can be a make-or-break proposition for small businesses. Poor claims management not only raises costs but also leads to many other issues.
Small businesses that don’t promptly and accurately handle claims risk their employees’ well-being, trust, and even their company's reputation.
That’s why great claims management is such a valuable proposition. Businesses with efficient and accurate claims management enjoy:
In this guide, we’ll examine the value that great claims management can actually provide.
Small businesses often face significant challenges with workers' compensation insurance, primarily due to their limited resources and expertise. As a broker or trusted advisor, you might notice that some of your clients suffer from issues like these.
One common issue is the financial strain caused by high premium costs, which can be particularly burdensome for small businesses with tight budgets.
Additionally, small businesses may struggle with understanding the intricacies of coverage options. This can lead to either over-insurance, which wastes resources, or under-insurance, which leaves them vulnerable.
Another major problem is the administrative burden associated with managing claims.
Small business owners often lack dedicated HR staff, forcing them to handle claims themselves. This can result in mistakes, delayed filings, or inadequate documentation, all of which can complicate the claims process. Furthermore, small businesses are more susceptible to fraudulent claims, as they may not have robust procedures in place to detect and prevent them.
Lastly, small businesses might find it challenging to stay compliant with ever-changing state regulations.
Non-compliance, whether due to ignorance or oversight, can result in severe penalties, legal challenges, or even the suspension of operations. This adds another layer of risk to an already complex area of business management.
Poor claims management can have a cascading effect on a small business, impacting its finances, operations, and employee relations. When claims are not handled properly, it can lead to:
For small businesses, which often operate with thin margins and limited staff, these issues can be particularly damaging. The lack of proper claims management processes can turn an already stressful situation into a crisis that threatens the very survival of the business.
In contrast, effective claims management helps mitigate these risks, ensuring that the business can recover quickly and continue operations smoothly.
The benefits of strong claims management go far beyond simply reducing costs.
Great claims management helps small businesses protect their most valuable assets: their people and their reputation. By handling claims efficiently and fairly, a business not only minimizes financial losses but also fosters a culture of trust and safety among its employees.
Great claims management adds value through:
Small businesses rely on every employee to perform a crucial role. This means the importance of maintaining a positive work environment cannot be overstated. Great claims management ensures that workers feel supported and respected, which in turn enhances loyalty and performance. This, ultimately, contributes to the long-term success and stability of the business.
Working with a PEO offers a practical solution to the challenges of workers' compensation claims management:
For many small businesses, the decision to partner with a PEO becomes a strategic advantage.
By leveraging the PEO’s expertise and resources, small businesses can enhance their claims management processes, reduce risks, and ultimately create a safer, more productive work environment. This partnership can transform how a small business approaches workers' compensation, turning it from a liability into a well-managed asset.
Mishandled worker’s compensation claims increase costs, disrupt operations, jeopardize employee relations, and can even cause legal trouble. Small businesses that lack the resources needed to combat these problems on the fly need to avoid them altogether.
BBSI understands this, which is why we prioritize a worker’s compensation claims management approach that seeks first to ensure quality employee healthcare and then cost-effective outcomes.
We do this by:
If you’re an insurance broker or a trusted advisor who’s interested in helping your clients gain access to better claims management, BBSI is here to help.
Become a BBSI partner today and get access to one more way to drive client growth.