Cluett Commercial Insurance Agency

Examining an alternative workers' compensation product

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Bruce Cluett, 781-582-1600

Over the past 12 months, I have spent a great deal of my time looking at alternatives that we as agents can look at for our clients. Many of us have the opportunity to write risks that have issues, or as I sometime refer to it, a challenged account. Cluett has dedicated a separate underwriting unit just to work on these risks that our agents and clients send us on a daily basis.

For Example:
  • A risk with a tough WC class that the
    traditional WC market no longer wants to write
  • A risk with a high experience mod
  • A risk that has experienced some tough loss history
  • A risk with multi-state exposure
  • A risk that requires specific coverage and/or endorsements
  • A risk that we simply need a very competitive price on among a host of other reasons.

    A great alternative that many of us are very unfamiliar with is a Professional Employer Organization, something many of us confuse with employee leasing and completely misunderstand. A PEO is NOT employee leasing.

    A PEO program is an excellent alternative that we MUST come to understand. The PEO program can meet our workers' compensation insurance problems that we are having difficulty addressing.

    With the PEO:
  • The insured/business owner does not give up any control with their employees. The employer hires, fires, lays off, determines pay scales and manages the basic elements they currently do
  • If an insured elects to accept their workers comp program, the only requirement of the PEO is to administer and service their payroll program. All other services are simply options that are available to the insured
  • Many PEOs include EPLI coverage
  • All PEOs offer a full HR service program. Many have in-house counsel to work with and assist all their clients. Whether it's used or not, there are no additional costs since this service is built into their fee structure,
  • Claims management services far exceed the services offered by most insurance carriers and will have a very positive result on your insured's independent experience rating factor(s)
  • The PEOs insurance carrier is required to maintain and file each client's unit stat card with the appropriate state rating bureau, or NCCI
  • There are no long-term contracts with most all PEOs. Usually a 60- to 90-day notice, if the insured wants to leave the program

    Know this...
    The PEO program simply provides the smaller business owner with the same advantages as the larger business owner/companies, such as the GEs, Raytheons and other employers with thousands of employees. The ability to purchase insurance products and services at a REDUCED COST.

  • PEO programs are growing at a 15 percent rate every year.
  • ADP and Paychex, which we all know or should know, are NOT agent-friendly. They are taking our clients. Both these payroll companies, as well as many others, are offering workers' compensation insurance to their clients through their own insurance agencies. Their Agencies are growing faster than we want to know and or admit.
  • Many of these payroll companies, especially ADP and Paychex, recognize and understand the huge benefits of the PEO program and have started their own PEOs. They are marketing this program to all their clients as well. Yes, again these are our clients.

    Cluett: A leading wholesaler of workers comp insurance nationwide:
  • As most of you know, Cluett represents many insurance carriers/programs, like AIG, Guard, Am Trust, QBE, V3, Arrow Mutual and many, many more. We are, in many cases, a top performing wholesaler nationwide for many of these insurance carriers.
  • Cluett is in the process of purchasing another wholesaler, which will increase our already sizable market base.

    But for all these positives, all these carriers and programs still won't meet all the needs that you our producers require. To accomplish this, Cluett must explore all alternatives, make these alternatives available to you and help you understand/present these programs to your insureds/clients. This is what separates Cluett from our competitors!

    Program education for PEOs:
  • At Cluett, we have set up a complete educational program on PEOs — just ask and we'll set this up for you and your agency staff. We have successfully done this for many of our agents.
  • We will present the PEO quote to you and your client via a GoToMeeting conference call. Our experienced presenters will answer any and all questions that you or your client have about the program.
  • Along with Cluett, the PEO program specialists will assist you in any and all ways to better service your client once the PEO sets them up within their program.

    A brief history of Cluett Commercial Insurance Agency:
    In 1981, I started working in the insurance industry with an insurance company that specialized in workers' compensation insurance. Over these past 33 years, I have done nothing but increase my knowledge of this insurance product to better service our agents and clients. I own and operate a large retail insurance agency. I built that agency based on the knowledge and experience I developed in workers' compensation insurance.

    In 1995, I decided my career would be much more fulfilling working with retail agents and helping them write and service their workers' compensation insurance needs rather than working against them. Today, I continue to do the same. I will explore and find new insurance markets, new programs and new alternatives that Cluett can use to help you meet the needs you have in this complex industry.

    The PEO program is a viable option for many business owners, so let Cluett help you understand it and use it to not only maintain your renewals, but write new accounts as well.

    For those of you that work with Cluett, we thank you for your continued business. For those of you that do not, I look forward in working with you.

    About the Author

    Bruce Cluett is the owner of Cluett Commercial Insurance Agency.