Dividend Programs: Driving Down Costs and Driving Safety in Moving & Storage Operations
by Terri Moran
If you are a moving and storage operation looking for ways to help control your workers’ compensation costs, you should consider dividend programs. Not only can this be an effective strategy to curb workers’ comp expenses, but it also carries the added benefit of promoting a safer, more efficient workplace.
How do Dividend Programs Work?
Insurance companies offer dividend programs that reward policyholders for maintaining a safe workplace. These programs return a portion of the premium to the policyholder if certain conditions are met, typically related to loss experience and loss ratio.
Benefits of Dividend Programs
1. Financial Incentives for businesses to improve workplace safety and reduce claims. Workers’ compensation dividend programs allow insureds to participate in the profits of the insurance carrier.
2. Risk Management to lower your overall risk profile, which can lead to long-term savings on insurance premiums.
3. Higher Employee Morale and increased productivity, creating a positive work culture.
4. Competitive Advantage : Companies with strong safety records and lower workers’ compensation costs can gain a competitive edge in their industry.
Eligibility
If you currently have a high loss ratio and often represented by a high experience modification, it’s likely in your best interest to work on your loss issues before requesting to participate in a dividend. Know the loss ratio triggers and how they are calculated.
There are often other requirements besides loss ratio, including the policy being in-force the entire policy period, making premium payments on time, and making sure you have completed the end-of-term premium audit. Check with your insurance broker for more information on your eligibility.
Considerations
If you’re considering a dividend program, know that upfront credits are often reduced by some amount with the opportunity to earn more on the back end, if your loss ratio is controlled. Also, dividends are never guaranteed; most dividends must be declared by the insurance company, and usually by their board of directors.
Dividends = Smart Move
Dividend programs can be a win-win scenario for moving and storage operations and insurers. If you’re looking to manage your workers’ compensation expenses more effectively, exploring dividend plans could be a smart move.
Stay tuned for more insights on managing business risks and optimizing your insurance strategies.
Disclaimer: This blog is for informational purposes only and should not be considered as professional advice. Always consult with a qualified insurance professional for advice tailored to your specific situation.
Terri Moran
Insurance industry veteran Terri Moran leads the underwriting and operational strategies for the MOVER’S CHOICE program. Throughout her career, Terri has held roles in leadership, underwriting and marketing with national insurers. A staunch industry advocate, she has served as a member of the WSIA Internship Committee, working to attract young professionals to career opportunities.
In her spare time, in addition to enjoying her family, she is a Member and past Chair of the Board of Directors for the Surplus Lines Association of California.