Insight: An Agent Resource

Industry Featured: Retail/Department Stores

The first in a series of articles that highlight the advantages and disadvantages of the Texas Nonsubscription Option

A significant number of retail establishments elect to be nonsubscribers in their Texas operations. This includes small retailers and dollar stores up to the giant chain department stores, and virtually every type of retailer in between. The fact that so many choose to nonsubscribe is in itself an endorsement for the choice. The reasons are, as with other industries, decreased costs and improved claims management.

While enhanced claims management is key to a nonsubscriber program, it can be challenging due to the vast range of differing exposures within a single store. Departments handle many small items, from small sewing needles to large household appliances. As the product varies, so do the exposures, especially so when delivery or customer pickup services may be involved.

Even with the widely varied exposures, there are some constants. This includes a large population of part-time employees, relatively low-paid employees and high employee turnover. These conditions create difficulty in return-to-work programs for injured employees (who may also be "moonlighters") in the workers' compensation system. This is because temporary income benefits payable under traditional workers' compensation are not taxable, according to the IRS, so an injured employee may experience very little change in income when he/she is off work for a compensable injury. The unchanged income can deter an employee from wanting to recover and return to work.

Successful nonsubscriber programs often require that an off-work injured worker must be under the care of a company-credentialed physician in order to be eligible for benefits. Also, the employer can instruct the doctor to provide an "activity report" stating what the employee can and cannot do while recovering, rather than simply stating that the employee cannot work. This provides the employer with the ability to allow the employee to return to work under "modified duty." With the large variety of functions performed within a department store setting, the employer will have a range of duties that might enable a temporarily disabled employee the ability to return to work.

Screening for problem-free employees is also more difficult due to high employee turnover and the costs associated with background checks, pre-employment physicals and drug screens. A nonsubscriber has a greater ability to overcome these issues than does the subscriber. For the nonsubscribing employer, being able to approve the medical provider treating employee injuries is key to controlling the questionable claims that are often associated with employees with unhealthy and/or problematic habits.

In stores that sell large items such as major household appliances, home theaters, furniture and similar items, the company's exposure to sprain, strain and lifting injuries is more common. In the retail store, the greatest exposure for both customers and employees tends to be slip-and-fall. While the store cannot control the footwear of its customers, it can address the footwear of its employees. Due to the program's focus on cost savings, nonsubscribers often have higher success in addressing slip-and-fall exposure, which can include investing in floor surfaces that provide better traction for pedestrians.

Many large department stores include a number of unique departments, such as candy counters, restaurants, tearooms and even beauty salons. As a result, these stores take on the risks and exposures of the food service industry, as well as those found in independent beauty salons and barber shops. The high frequency of carpal tunnel syndrome (CTS) cases among hair stylists is one example of increased exposure. Nonsubscribers' use of occupational clinics as their approved health care providers and their definitions of repetitive trauma injuries help ensure there are fewer misdiagnoses of work-related CTS.

As previously mentioned, retail and department stores typically have large numbers of part-time employees. These employees tend to be either very young or very old. Because of this, both subscribers and nonsubscribers may have increased exposures associated with certain age groups (some nonsubscriber insurance policies do not cover employees under the age of 18, and some do not cover employees over age 65). The nonsubscribing employer may have an advantage over the subscriber in these cases by virtue of being able to utilize Social Security benefits and Medicare/Medicaid benefits, as well as greater scrutiny of pre-existing conditions such as diabetes, arthritis, etc., that can often increase exposure to a job-related injury claim.

Security is a major concern for department stores due to the combination of shoplifting and pilferage exposures and access to high-valued small items, such as jewelry. Security concerns also help with the investigation of employee injury claims because of the placement of security cameras and personnel who are trained in investigations. This is particularly helpful when defending disputed and/or fraudulent claims. Because of mandatory arbitration in a proper nonsubscriber program, the employer is in a position to more vigorously defend against these claims than is the subscribing employer, who must relinquish resolution of disputed claims to its workers' compensation insurance carrier.

Historically, retailers and department stores have reduced their loss ratios by 40 to 80 percent upon withdrawing from the state workers' compensation system and setting up a proper nonsubscriber program. It's a good fit and one that more and more department stores are implementing.

A New Approach to Communicate and Distinguish You From the Others

Insurance agents know their business is all about communication and communicating with prospects, clients and the general market. It is something agents must master to build their agencies and support their clients. That doesn't mean it is easy.

In a post on Property Casualty 360°, Richard Gilman suggests that the first step to tackling client engagement is to imagine your audience as one person, always. Instead of using insurance jargon, pretend you are talking with a friend or a family member. How would you explain this topic to your neighbor? Keep it light, friendly and natural.

Technology is making communicating your message easier than ever before. Consider using a platform such as Facebook Live and answering some of the more commonly asked questions your customers have. The Facebook Live feature allows your clients to ask questions in real-time as well. This experience will make you seem more accessible, more human, and will promote client satisfaction and generate buzz among your prospective clients. To read the full article, click here.

ALL ABOUT YOU: How Are You Listening?

Think through the course of your day. How many emails do you send and receive? How many phone calls do you make? How many meetings or conversations take place on your average workday? We all spend hours of our days dedicated to communicating. But do we do it well?

People who study communication agree that when communication failures occur it is often because of a lack of listening to what the other person is truly saying. Social scientists and psychologists have identified types of listening that can be generalized into three categories: passive listening, active listening and empathetic listening. Most of us practice passive listening or active listening, where we are either ignoring what the other person is saying or focusing on their words only to come up with a good response. Empathetic listening is listening with the intent to understand. It is considering what the other person really means, not just the words they are saying.

Do you practice empathetic listening? How many communication errors do you think you could avoid in the future if you tried it?

Challenge: Every time you speak with someone for the rest of your day, try to interpret what they are saying through their perspective, then think about your response. Are you really listening?