How Business Owners Should Handle Insurance Carrier Recommendations

New Hampshire Business Insurance:

Handling Insurance Carrier Recommendations

As a New Hampshire business owner, you take on a certain level of risk—it’s unavoidable. Losses related to fires, floods, workplace accidents, products liability and other kinds of exposures are common for organizations of all kinds. 

To address these concerns and risks, the right insurance policy can prove invaluable, allowing you to transfer risks and focus on growing your business in New Hampshire.

While insurance carriers will cover an organization’s losses, they expect their policyholders to reduce their level of risk whenever they can and often have specific risk control guidelines.

In fact, insurance carriers play an active role in risk management, often assigning risk managers to inspect policyholders’ facilities and work areas. If an issue is found during any of these inspections, the insurance carrier may provide recommendations businesses must follow in order to maintain coverage and avoid higher insurance premiums. This Coverage Insights provides general information on insurance carrier recommendations and how to handle them.


What Are Insurance Carrier Recommendations?

Insurance carrier recommendations typically stem from an inspection from a risk manager, often referred to as a loss or risk control inspection. These inspections may occur when a carrier writes a new policy or on a set schedule (e.g., once every three years).

Many insurance carriers utilize third-party vendors to conduct these inspections. This is especially common for smaller premium insureds.

Following an inspection, insurance carriers will provide recommendations if they identify an unacceptable risk at a business they insure. Oftentimes, these risks are tied to a specific line of coverage.


For example, an insurance carrier who provides property coverage for a restaurant may inspect the business, looking specifically at fire hazards and other exposures that directly impact the organization’s property. If the proper risk management protocols are not in place, the risk manager will likely make a recommendation.

In general, recommendations are based on:


Insurance carrier recommendations are part of a larger strategy commonly referred to as loss control, risk control or loss prevention. Together, these inspections and recommendations are designed to reduce the level of risk a carrier is taking on across a book of business. From a policyholder perspective, insurance carrier recommendations are opportunities to improve safety and limit the potential of disruptive and costly claims.

How Should I Handle a Recommendation?

Not every business will receive a recommendation following an inspection, but it’s still important to understand the role your businesses plays in continued safety and risk management. What’s more, if and when you receive a recommendation, it will often contain strong language and outline serious consequences if you fail to respond appropriately.

Knowing how to handle a recommendation ensures risks are identified and addressed in a timely manner. The following are some tips to consider if you receive a recommendation:

  • Ensure the recommendation is based on accurate information and that it accounts for a legitimate issue (e.g., sprinkler systems are installed improperly). If you have any concerns related to a specific recommendation, talk to your insurance broker. They will likely have a relationship with the insurance carrier’s underwriters and risk managers, and can act as your trusted representative and communicator.
  • Make note of the date the insurance carrier wants you to address issues detailed in a recommendation. For simple recommendations, time might not be an issue. However, for more challenging recommendations (e.g., rewiring a building), you may want to speak with your broker and make them aware of any timeline-related concerns.
  • Complete the recommendations as soon as possible and send any required documentation to the insurance carrier. Each carrier is going to have different requirements—some may perform a follow-up visit while others may simply require you to confirm the recommendation was complete. In some instances, carriers may require businesses to prove a recommendation was addressed. As such, be prepared to provide evidence, such as receipts, photos, contracts or other supporting documents. 

There may be instances where a business disagrees with a particular recommendation. For instance, the business may:

  • Believe the cost to address a recommendation is too high.
  • Disagree with more subjective recommendations.
  • Believe the risk has already been addressed and that the recommendation is unnecessary.

In these situations, businesses will need to do their due diligence before they contest a recommendation. While the term “recommendation” may seem voluntary, insurance carriers expect their policyholders to address any issues brought to their attention. Organizations should work with their insurance broker when contesting recommendations and follow their guidance to avoid a loss of coverage or other repercussions.

Simply put, when businesses fail to implement a recommendation, the insurance carrier may cancel the policy if it is within their rights. And even if the policy is not canceled right away, the carrier may refuse to renew the policy or increase the policyholder’s premiums due to a higher level of risk.

When this happens, some businesses may decide to change carriers. However, new insurers will likely make similar types of recommendations, and policyholders may be left with no other choice but to address their risks.

What’s more, failing to complete a recommendation can open the door to increased liability. This is because businesses that are aware of an issue but choose not to address it may be viewed as negligent.

Additional Considerations

Recommendations are usually issued after a loss or risk control inspection. After the inspection is completed, consider speaking with the risk manager to discuss any concerns. This will not only give you a deeper understanding of the types of hazards present at your workplace, but it will also give you insight into the scope of the work.

Above all, it’s crucial to be prepared for insurance carrier recommendations. While there can be some subjectivity to recommendations, they are largely based on existing standards, and understanding the rules and regulations that apply to your business can go a long way toward managing your risks.

Don’t take recommendations personally—insurance carriers are simply looking to minimize their risk. The more cooperative you can be, the smoother the process will go. Contact Davis & Towle Insurance Group today for more guidance on insurance carrier recommendations, or recieve a NH insurance price comparison by contacting us for a free quote. 


Get help from a local agent and get the best coverage for your business and budget.

Submit our NH business insurance quote request form:

  • This field is for validation purposes and should be left unchanged.

This Coverage Insights is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. © 2019 Zywave, Inc. All rights reserved.

Creating and Maintaining a Drug-Free Workplace

NH Small Business Resource:

Creating and Maintaining a Drug-Free Workplace

Illicit drug use and drug addictions are an unfortunate occurrence that we often see broadcasted on the evening news or even directly affecting the people we know. Businesses are not exempt from facing this epidemic as the use of drugs continues to make its way into the workplace. With companies trying to navigate through the challenges of finding qualified, drug-free employees, many have unfortunately opted not to drug test employees, and have neglected the importance of a drug-free workplace.

It’s more important now than ever before that employers have a well-established drug testing program to help reduce the potential for injuries and to prevent large losses to equipment and property from drug-related accidents. According to the National Drug-Free Workplace Alliance, businesses in the U.S. have lost billions of dollars each year because of employee-related alcohol and drug use on the job. Although there are challenges in maintaining a program, it is safer and more cost-effective, in the end, to hire and retain employees.

The following are key components to consider as part of a Drug-free Workplace Program.

A written policy that

should clearly define the components of the program to include drug and alcohol testing procedures. The program should be reviewed by your legal counsel before implementing.

Supervisor training

should be conducted to ensure the program is properly enforced.

Employee education

on the program should be performed to include the dangers of drug and alcohol use in the workplace. All training should be documented and kept on file.

Employee assistance

should be used to identify those struggling with alcohol or drug abuse and help resolve (through proper treatment) personal problems associated with it.

Pre-employment drug/alcohol testing

should be performed and drug testing for reasonable suspicion incidents and post-accident.  Drug testing procedures should be clearly defined and communicated to all employees.

Establishing and maintaining a Drug-Free Workplace Program with these components will promote the continued safety of all employees. The following resources provide additional information to implement a Drug-Free Workplace program.



National Drug-Free Workplace Alliance: “Industry Statistics.”

Central’s Bulletin on Drug-Free Workplace

 Post authored by Cory Eickholt. Originally published September 4, 2018. View original post at:

Products underwritten by Central Mutual Insurance Company and affiliated companies.

Copyright © 2018 Central Mutual Insurance Company. All rights reserved.


Get help from a local agent and get the best coverage for your business and budget.

Submit our NH business insurance quote request form:

  • This field is for validation purposes and should be left unchanged.

NH Business Owners Need To Ask These Questions Before Renewing Your Commercial Insurance

NH Commercial Insurance Renewal

A lot has happened over the past year. The many ebbs and flows a business goes through may mean your coverage is no longer adequate, or perhaps better pricing is available. Look for these changes that warrant a review of your NH business coverage before signing up for another policy year.

As a NH small business owner, you have a lot on your plate. Obviously, making a profit and keeping your business growing are of paramount concern. In addition, there’s making payroll, staying competitive, staying on top of new healthcare and tax laws, complying with state and local regulations, etc., etc. It’s easy to overlook important changes that may have occurred in your business and need to be accounted for on your NH Business insurance policy. Your annual policy renewal is a great time to consult with your independent agent and make sure you are properly protected, as well as not paying for coverage for exposures you may no longer have.

Consider these changes and review any that apply to your NH Business, 60 to 90 days in advance of your insurance Policy Renewal:

• Has the name of your business changed or are there any new Doing Business As (DBAs)?

• Has the legal entity changed (for example, has the business incorporated or been formed into a LLC?)

• Is the nature of the business basically the same? Are there operations or divisions that have been discontinued?

• Is your building insured to value? This is very important if there is a coinsurance clause.

• Has your personal property total increased or decreased in the last year?

• Have you made improvements to your building such as a new roof or installation of a sprinkler system? These may qualify your property coverage for a credit.

• Have your payrolls or sales changed since last year? General Liability is often rated on one or both of these exposures. Workers Compensation is rated on payroll.

• Have you removed or added vehicles and not advised your agent? Have you hired new drivers?

• How old are the vehicles in your fleet? If some of your vehicles are over 10 years old, you may want to consider dropping physical damage coverage on them.

• Is your business eligible for a drug free workplace discount on your Workers Compensation policy? If so, submit the paperwork to your agent.

• Finally, do you need additional coverages such as Employment Practices Liability, Cyber Liability, Employee Theft, or Professional Liability?

No two policies are alike, which is why it’s important to discuss the specifics of your NH Business Insurance policy with an agent.

Renewal Around The Corner?

Remembering to contact an agent 60-90 days before your renewal? That’s another task on your plate.

So let us know your renewal date now! We’ll make a note of the date and follow up to discuss your renewal options, and available savings at the right time.

Contact me closer to my policy renewal date to review & quote my coverage.

4 + 2 =

Post authored by John Carroll. Originally published August 18, 2016. View original post at:

Products underwritten by Central Mutual Insurance Company and affiliated companies.

Copyright © 2016 Central Mutual Insurance Company. All rights reserved.

The Impact of Experience Rating on Your Workers Compensation Premium

Understanding Your Workers Compensation Premium



Experience Mod Factor


A quick review:
We now know that class codes are used across the insurance industry to categorize different jobs by the risk of the work performed by employees. Class codes are factored into your premium calculation to account for the likelihood of injury for that category of work.

We continue our review of the key cost-driving factors by delving into the second factor in premium formulation – the Workers Compensation Experience Modification (Mod).

The Basics:
The workers compensation “experience modification number” is a rating prepared by the National Council on Compensation Insurance (NCCI). A handful of states use their own system, but we’ll concentrate on NH where NCCI prepares it.

Based on a 3 year period, companies that have paid at least a certain amount in work comp premium, receive mandatory experience rating.

The Purpose
What is the purpose of the experience rating? Insurance companies are able to take on your individual risk at a reasonable cost by spreading or sharing your risk with other customers within your industry. This is a basic
mechanism of insurance.

In a sense, you are not paying premiums just to cover your potential annual losses. Your premium will help to
pay losses accrued by everyone. Let’s say you were loss-free in 2016. Then in 2017 you have a loss that is almost twice your annual premium. Carriers will be able to cover your 2017 loss because of the other companies who, similar to your 2016 year, have contributed more premium than the cost of their losses. That surplus is what carriers use to pay for that big loss of yours in 2017.

In our review of class codes, we discussed that different occupations present different levels of risk. In a similar fashion, each employer presents a different level of risk compared to others in their industry. Two different general contractors can have very different approaches to safety and training. Those two contractors still fall into the same class code, so class codes alone clearly fail to capture the whole story. That’s where your mod factor comes in; to illustrate your operation’s unique level of risk based on your recent history.


Your premium 

Your Mod compares your actual claims history to your expected claims history based on your size and industry.

If your claims are higher than expected, you will be given a debit Mod (greater than 1.0); if your claims are lower than expected, you will be given a credit Mod (below 1.0); and if your actual claims match your expected claims, your Mod is neutral at 1.0

As you may expect, it’s a lot more complicated than that quick overview but this explanation is intended for the purpose of understanding the basics.


In Practice


To Illustrate how your Mod affects your premium, let’s take a look at a few scenarios:


Now you have a broad-brush understanding the purpose of experience modification numbers, but the question remains; Why does knowing this help you? 

Your Mod has a direct impact on your premium. The fact that you actually have some degree of control over it, makes it notably important. If you pay attention and employ loss management strategies, your Mod will probably stay low.

Here are some things you can do to keep your experience modification number low:


Keep tabs on it:

Review your NCCI report with your agent/broker at least annually to stay on top of how your Mod is trending and make sure the data is accurate.

File claims quickly:

Have an efficient procedure for filing claims. The sooner the provider is notified, the sooner a claims professional can begin to validate the claim, determine and approve benefits, verify and monitor medical expenses, and do what they can to help your employee get back to work. Which brings us to..

Get employees back to work quickly:

Adopt a return to work and/or temporary alternate duty (TAD) program in place to encourage employees to get back to work as soon as possible. The longer an employee is out of work, the harder it is to get them back. So get them back to work as soon as possible, even if it is only for a few hours a week or doing something that is outside of their normal duties.

Implement and monitor a safety program:

Make workplace safety a priority in your business. Not only will this help you maintain a healthy Mod but it may have the added benefit of creating a culture where your employees feel they are being cared for.

Incentivize time without incidents:

Small but more frequent claims will have more of an impact on your Mod than one large claim. One method to encourage safety in the workplace is by giving employees a special treat or a small bonus for reaching defined periods of time without and injury.

Get buy in from the top down:

In many organizations, the employees will not take these steps seriously unless their direct supervisor is taking it seriously. As the owner, partner, executive, or GM safety begins with you. Your managers and supervisors have to understand how important it is to the organization so they will, in turn, relay its importance to your lower level employees.


Understanding NH Workers Compensation Premium: What’s your class code?

Written By:

Jeff Reardon, AAI

Commercial Account Executive


Have you ever looked at your worker’s compensation bill and wondered, “How did they come up with this price!?”  Well to answer your question, it’s basically calculated using a three-part formula. Still unclear? Understandable. That’s why I’m going to explain each part in a series of quick-read, posts. By the end, you’ll understand the numbers used to calculate your premium and the formula for doing so.

This is part A of the formula.

Part 1: Your Workers’ Compensation Class Codes

The first component we’ll look at is the workers’ compensation class code. The codes are established by The National Council of Compensation Insurance (NCCI); an independent organization that analyzes industry data.
Using data on the severity and frequency of claims within a specific industry, NCCI categorizes different jobs into class codes that represent the level of risk* associated with the industry/occupation it is assigned to.

*When we are taking about workers compensation “risk”, we are referring to the likelihood of an employee being hurt while on the job.

Keep in mind; your workers compensation policy is a contract between you and the carrier. It says that they agree to pay for an employee’s work-related injuries, in exchange for your annual premium (more or less). It makes sense that premiums would generally increase as the chance of injury increases.

Class codes help carriers account for the variation in risk from one job to another, so they can calculate an appropriate premium.

To highlight this concept, let’s compare two very different occupations:

New Hampshire Workers’ Compensation Voluntary Market Rates for 2018:

Carpenter (5403): $9.01

Accountant (8803): $0.08

As you can see, the accountant will pay much less than the carpenter because the accountant is much less likely to suffer  from an on the job injury (according to NCCI).

How does this apply to YOUR industry?

There are usually a variety of class codes that apply to the work performed in a given industry. You can find them all listed on the NH Insurance Department Website, where you can compare the qualifiers for different class codes, and the rate assigned to them. To get an idea of how this applies to you, search for any job that you pay an employee to do. Look at the definition and the “related” class codes. Do you think any of them apply to the scope of work done in your operation? Is the variation in rates between two class codes, what you would expect based on the variation in risk?

The Takeaway

The formation of your worker’s compensation premium begins with determining which class code(s) is the best fit for your business. Therefore, it is important for you to know a little about how they work and more importantly, what class code accurately classifies the work your employees do. I’m a big fan of “trust but verify” and chances are you have been assigned the right code; however, it cannot hurt to have a conversation with your advisor to make sure this is true.

Keep an eye out for Part 2: Your Workers Compensation Modification Factor.

Written by:

Jeff Reardon, AAI

Commercial Account Executive

Don’t be shy! Email me your insurance questions & requests.

Control rising workers’ compensation costs with these 5 steps

Control rising workers’ compensation costs with these 5 steps

Control Rising Workers' Compensation Costs With These 5 Steps


Why It Matters…

All employers should strive to keep their employees as safe as possible, and it also makes the most sense for the health of your business.

  • Studies indicate that properly designed, implemented and integrated safety programs lead to a return on investment, and that firms will see direct bottom-line benefits.
  • A competency-based safety program is compliant with OSHA construction requirements and therefore reduces the threat of OSHA fines.
  • A safer job site creates better morale and improves employee retention. Auditing keeps your programs fresh and effective, and drives continuous improvement.
  • A competency-based program produces people who are fully engaged in every aspect of their job.

The Five Steps

You can control workers’ compensation costs with five steps designed to create a well-rounded safety program that produces a safer job site, achieves OSHA compliance and reduces accidents.

1. Establish Compliance Standards


In addition to being a requirement for those in the construction industry, OSHA standards provide a good pathway to incident reductions across all industries. A good number of accidents stem from poorly developed, poorly trained or poorly implemented OSHA programs.

OSHA construction standards require written programs be developed and then communicated to workers. Experience shows that companies with thoroughly developed, OSHA-compliant programs have fewer accidents, more productive employees and lower workers’ compensation costs.


2. Integrate Programs into Daily Operations


Policies alone won’t get results; the program must move from paper to practice to impact your bottom line. Achieving this requires a strategic plan clearly communicated to workers, good execution, and a culture that both inspires and rewards people to do their best.

As with any business initiative, the success of your safety program depends on putting supervisors in the best position to succeed. If your frontline supervisors understand the program and are motivated to make it work, the program succeeds; if not, the program is an endless drain on resources and energies. Providing supervisors with knowledge and skills through training is critical to the success of any program.

Successful safety programs focus on being proactive instead of reactive.


3. Accident Investigations

Accident investigations provide an excellent source of information on real or potential issues present on the job site. Since workers’ compensation covers a worker’s wages for injuries or illnesses that arise from or out of the course of employment, increasing claims drive up workers’ compensation costs. To reduce costs, you must reduce accidents. And the ability to reduce accidents is significantly enhanced when they are fully investigated instead of simply being reported.

Accident reports are historical records that only cite facts, while accident investigations go deeper to find the root cause and make improvements. To stop rising workers’ compensation costs, you must have an effective accident investigation process that flushes out the root cause of the problem. Unless the root cause is discovered, recommendations for improvement will be difficult if not impossible to implement. Again, training proves beneficial because a site supervisor skilled in incident analysis is a better problem solver for all types of issues, not just safety.

All accidents should be investigated to find out what went wrong and why. Many firms focus solely on recordables or lost time accidents because of the significant costs involved, but they don’t realize that the small costs and high numbers of first aid-only incidents add up. Statistics show that for every 100 accidents, only 10 will fall under OSHA regulations as recordable. If you investigate only the accidents you must, the vast majority will go unnoticed. Reducing serious accidents means you must reduce your overall rate of all accidents–including first aid-only incidents. That only happens when every incident is fully investigated to find the root cause, and corrective actions are identified and integrated into daily job tasks.


4. Training

The fourth step focuses on training, which plays a significant role in safety and in reducing workers’ compensation costs. The goal of training is to develop competent people who have the knowledge, skill and understanding to perform assigned job responsibilities. Competence, more than anything else, will drive down costs. Site supervisors must have the knowledge and ability to integrate programs into each job on the job site so that employees know what is expected of them. Contact your representative at Davis & Towle Insurance Group for insight on available safety materials and programs.


5. Continuous Improvement

The final step is auditing your safety program for continuous improvement. Once the programs are developed and implemented, they must be reviewed on a regular basis to make sure they are still relevant and effective. This might require a significant change in how you manage your safety program, but if your workers’ compensation rates are high it may be time to make this leap.


Work with experts.

At Davis & Towle Insurance Group, we are committed to helping you establish a strong safety program that minimizes your workers’ compensation exposures. Contact us today at 603-225-6611 to learn more about our OSHA compliance and safety program resources.

Provided by Davis & Towle Insurance Group : This Risk Insights is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. © 2010 Zywave, Inc. All rights reserved.

Request a quote

  • This field is for validation purposes and should be left unchanged.