Key findings
The report includes findings based on 300 small business owners' responses about their existing workers' compensation insurance programs. It found that a workers’ compensation claim experience can influence a small business owner’s confidence in their insurance program, including the services they value and the workplace safety measures they have in place. Once a small business owner experiences such a claim, their insurance priorities shift away from price and towards safety.
With more than 2/3 of small business owners reporting that they consider a recommendation from their insurance agent to be a very important factor when purchasing workers’ compensation insurance, there is a clear opportunity to proactively discuss value beyond price with their customers — before they have a claim.
A Focus on Workers' Compensation
As a leading insurance carrier for small businesses, The Hanover is proud to partner with independent agents as they provide their consultative services to small business owners navigating the evolving risk landscape. This report provides valuable information for independent agents to help small business owners address their workers' compensation needs.
Our 2024 report is focused on workers' compensation and captures the feedback of small business owners nationwide. Our study uncovered information on purchase decisions,
value-added services and the impact of a claims experience.
The Hanover's 2024
Small Business Risk Report:
Purchasing influences
When it comes to purchasing workers' compensation insurance, small businesses prioritize different factors based on whether or not they have experienced a claim. For businesses without any claims, price lands in the top considerations. However, for those businesses who have had at least one claim in the past, price becomes less important as their focus shifts towards risk management services and claims handling. In fact, almost 60% of small business owners who have not experienced a claim rank price as one of the two most important factors in their workers’ compensation purchase, while only 40% of business owners who have had more than one claim rank price as one of the top two factors in their purchase decision.
Furthermore, the more claims that a small business owner has experienced, the greater value they place on risk management
and claims, with 45% of small business owners who experienced more than one claim rating
risk management services as one of the top two considerations.
Top considerations when purchasing a workers’ compensation policy
Small businesses tend to closely evaluate their insurance program when making buying decisions, especially after facing claims.
completely agree that they spend sufficient time
exploring their insurance options.
The value of consultation
More than two-thirds of small business owners consider a recommendation from their insurance agent to be a very important factor when purchasing workers’ compensation, and it’s clear that small business owners need and value the consultative services their insurance agents provide and are proactively looking to their insurance advisors for advice. Agents can leverage their experience and insights to educate customers about the importance of services and claims handling as essential components of their workers' compensation program.
Small business owners’ approach to safety
of small business owners say that
they provide safety training to their employees at least once a year
are very confident they have proactive measures in place to help keep employees safe
believe they have a
strong safety culture
However, survey data shows they lack a comprehensive approach to proactive measures, indicating that small business owners need additional risk mitigation resources that go beyond regular trainings.
Opportunities for a more holistic risk management approach
workplace hazard assessments
63%
38%
business continuity planning resources
33%
telematics
(driver safety monitoring)
48
%
rate safety culture as "excellent" once they have faced a claim
70% rate safety culture as "excellent" when they have never experienced a workers' compensation claim
Yet, only
Claims can impact confidence
67% of small business owners have had at least one
workers' compensation claim in the past five years.
Risk management services
Small business owners recognize the importance of risk management services, but only 63% of small business owners
without any past workers’ compensation claims are very confident in their current preventative measures to prevent workplace injuries.
However, as small businesses encounter claims, their priorities shift, leading them to prioritize a more expansive and
holistic approach to risk management.
68%
Conduct regular inspections and safety audits
65%
Have a health and wellness program
51%
Leverage a nurse triage service
51%
Conduct regular inspections and safety audits
53%
Have a health and wellness program
21%
Leverage a nurse triage service
Small business owners
without claims
The value of proactive safety measures
With only 21% of small business owners taking advantage of a nurse triage service before they experience a claim, it presents an opportunity for agents to educate customers on the value of proactive safety services like this before they have a claim. By leveraging a nurse triage service, business owners can get their employees the expert advice and care they need right away. The number of small business owners utilizing such a service jumps to 51% once they have experienced more than one claim, demonstrating the clear value.
The state of small businesses
The most common change that
small businesses experienced is the hiring
and onboarding of new employees.
With 68% of small business owners reporting that they have hired and onboarded new employees within the past 12 months, the need for regular training and ongoing communication about available resources becomes even more apparent. In addition, small business owners report that they have purchased new machinery or equipment, added new products or services and renovated their facility.
Along with hiring and training of new employees, 34% of small businesses said they had payroll changes in the past 12 months. Often, small business owners provide these updates to their insurance agent, presenting an opportunity to deliver more value through convenient pay-as-you-go services for workers’ compensation.
Payroll based premium payments as a key service
34
%
said they are leveraging a payroll company to make real-time payments for workers’ compensation
83% would find it valuable if their workers’ compensation premiums were calculated by actual real-time payroll, rather than payroll estimates
Yet, only
Businesses with no claims
Businesses with claims
Overall, 88% of respondents report they are confident they are adequately insured. However, there are many factors that small business owners anticipate could impact their workers’ compensation insurance program in the future.
What’s on the horizon?
Mental health and stress related claims
A noteworthy concern for 36% of respondents is the rise in mental health and stress-related claims. This data is particularly significant for business owners who have faced multiple workers' compensation claims, with 53% highlighting it as their top concern.
Technological advances
37% of respondents recognize the impact of technological advances on their insurance needs, and technological advances ranked two and a half times higher for small business owners who have had claims. This indicates the need for innovative solutions to help reduce claim exposures and enhance risk prevention strategies.
Economic downturn
39% of respondents anticipate potential economic downturns, highlighting the need for insurance programs that can weather financial uncertainty.
Cost of insurance
Small business owners are cost-conscious, and
a claim can be a costly interruption. This presents
an opportunity to promote the value of preventative measures to mitigate the risk of claims.
Changing workforce demographics
Nearly three times higher for small businesses with multiple claims, changing workforce demographics is a concern for 29%
of respondents. This aligns with the fact that 68% of respondents hired and onboarded new employees in the past year.
Remote workforce
With 29% of respondents anticipating remote workforces, businesses must adapt their insurance programs to encompass the unique risks associated with this evolving work environment.
Pandemics/infectious diseases
The impact of pandemics and infectious diseases is on the radar of 34% of small business owners. This heightened awareness demonstrates the need for insurance programs that provide adequate coverage and support in times of unforeseen health crises.
39%
56%
37%
36%
As evidenced by the survey data, small business owners often face
a variety of changes as their business evolves that can impact their workers' compensation insurance program. By proactively consulting, agents can offer guidance and valuable insights, identify potential risks and ensure that small businesses are taking full advantage of risk management services to stay ahead of risk.
The importance of
proactive consultation
About the study
Statista surveyed 300 small business owners who have workers’ compensation coverage throughout the U.S. In the survey, small business owners were asked about their past claims experience, how they view their future claims vulnerabilities and the value of risk management services to their business as they consider future changes to their business. The Hanover was not identified as a participant or sponsor of the survey.
About Statista
Statista is a global online platform that specializes in data gathering and visualization. In addition to publicly available third-party data, Statista also provides exclusive data via the platform, which is collected through its team's surveys and analysis. Established in Germany in 2007, Statista operates in 13 locations worldwide and employs around 1,100 professionals.
About The Hanover
The Hanover Insurance Group, Inc. is the holding company
for several property and casualty insurance companies, which together constitute one of the largest insurance businesses
in the United States. The company provides exceptional insurance solutions through a select group of independent agents and brokers.
Together with its agents, The Hanover offers standard and specialized insurance protection for small and mid-sized businesses, as well as for homes, automobiles, and other personal items. Find out more about The Hanover's workers' compensation solutions.
Press Contacts
Calculated based on the top two responses for each category.
Actionable Insights
While most small businesses offer safety training, there are real opportunities
to enhance safety with additional services.
Businesses are not consistently taking advantage of:
35%
nurse triage services
Once a claim takes place, confidence in a business' safety culture significantly drops:
However, only
45%
Many small business owners experienced changes that could impact their insurance program in the past year, yet not all have consulted with their insurance advisor to review the impact of these changes.
of small business owners reported having at least one change in the past 12 months
of small business owners have hired new employees in the past year
Small business owners
with claims
Emily P. Trevallion etrevallion@hanover.com 508-855-3263
Kyle Tildsley ktildsley@hanover.com 508-855-3287