Insurance News - National Poll: Most Small Businesses Have Little ...

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Despite multiple self-insured group (SIG) failures across the country over the past several years, the majority of small businesses (53 percent) report they have little or no knowledge of how SIGs work according to the recent Small Business Opinion Poll conducted by ORC International commissioned by Employers, a small business insurance specialist.

According to the Company, in addition, 41 percent of current and former SIG member small business decision-makers don't realize they are in fact financially responsible for the workers' compensation claims of all the companies in their SIG - often for years - not just their own businesses.

The latest Employers Small Business Opinion Poll reveals an increasing trend of misunderstanding about SIGs as 40 percent of small businesses incorrectly believe that SIG members are not financially responsible for claims of all companies in the SIG compared to 32 percent in the same 2008 poll.

"While large global corporations today continue to report strong profits on increased productivity, America's small businesses continue to face challenges to growth, remain wary of hiring and naturally must closely evaluate business expenses," said Douglas D. Dirks, president and chief executive officer of Employers. "While close and continuous examination of costs is smart business, many small businesses are lured by self-insured groups' promises of lower costs, which unfortunately expose them to increased risk. It's important that small business decision-makers understand the collective financial risk and liability they inherit should other group members default, leave the group or if the group is forced to close."

The group noted additional Insights from the Employers Small Business Opinion Poll:

-Less than half of current and former SIG members (43 percent) were aware of the financial requirements to leave a SIG (reinsurance, bond or letter of credit)

-31 percent of current and former SIG members don't believe they would be financially responsible for all claims occurring during their membership, even after leaving a SIG

-34 percent of current and former SIG members incorrectly believe they can only be sued for a portion of the claim costs owed by the group

-32 percent of all small business decision-makers polled don't believe that individual SIG members can potentially be sued for the complete workers' compensation claims costs owed by the group

-Small businesses with one to four employees are the least knowledgeable about SIG-related risks

Employers Holdings is a holding company with subsidiaries that are specialty providers of workers' compensation insurance and services focused on select small businesses engaged in low-to- medium hazard industries.

More information:

employers.com

((Comments on this story may be sent to newsdesk@closeupmedia.com))

Source: http://insurancenewsnet.com/article.aspx?id=271040&type=lifehealth

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