One factor that insurance companies use to underwrite your contractors Workers Compensation insurance policy is loss ratio. Simply put, your loss ratio is the dollar amount of losses divided by premium. A contractor with a loss of $10,000 who paid $20,000 in premiums would have a loss ratio of 50%. Within the last few years, we have seen a drastic drop in contractor’s payrolls. Given that trend, the same contractor with a loss of $10,000 might only be paying a premium of $10,000. His loss ratio would now be 100% and the risk would be much less attractive to underwriters.
Current losses can cost you much more if you have less payroll than in past years. One recommendation is - don’t cut back on your safety program! Investing your time & money in a safety program will protect you and your business in the long run. Make sure your safety program is current & up to date.
Source: SCHB Self – Insurers Fund (Andrew Woodham, Marketing Manager)
An innovative new product called “home value warranty” is being offered by Isential, Inc. of Dallas, Texas. This product is sold in conjunction with spec and custom homes and it protects the buyer against having to take a loss on resale of the home in a depressed economy.
Isential asserts that such an assurance will result in the sale of more homes by builders as it will increase buyer confidence. The product is available nationwide.
This product should not be confused with home owners warranty insurance which protects the home owner against construction defects.
Source: Isential, Inc.; http://www.insential.com/
Chubb Group of Insurance Companies recently conducted a nationwide survey of 1,000 people and “more than four in 10 Americans are worried that the economic environment can expose their families to crime…”
Here are some of the findings:
- 41 percent of those who responded to a nationwide survey are anxious about crimes that they and/or their families will be exposed to based on the economy
- 40 percent are disturbed about domestic contractors’ dependability
As for improvements to the home:
- 45 percent intend to prolong home improvements such as additions or renovations
- 25 percent intend to cut back their spending on repairs and maintenance
Source: 2008 Chubb National Home Protection Survey
