A few weeks ago, I had the privilege of driving over to the Franklin Township offices to deliver a dividend check.
As a Baily Insurance Agency employee, there’s hardly anything I enjoy more than seeing our clients succeed at managing their risk and keeping their insurance costs relatively low.
This particularly sunny spring day, as I drove across town, I started thinking about all of those townships and boroughs our agency insures.
When we share most client stories, we discuss the problems our client was struggling with and explain how we addressed those problems.
With our new clients, we start our work with them by assessing their insurance programs and needs and identifying areas of weakness. Then we set to work alongside them implementing solutions.
But this story is different.
It’s the story of a long-term relationship with a township that has actively worked to control its insurance expenses.
It’s a celebration of their success and a testimonial to what you can expect when you put in place the best practices needed to manage your risks.
By reading this article, you’ll see a practical example of what you can do to address your municipality’s insurance problems and take control of your premium costs.
Franklin Township and Baily Insurance
For more than 50 years, Franklin Township has had an ongoing relationship with Baily Insurance. That’s not to say they have partnered with us for all of those years, but Franklin Township has trusted us for its insurance needs for a majority of them.
What has impressed me most with this municipality is how effectively they run their municipality. This township makes great fiscal decisions, is proactive in its planning, and simply does a lot of things right!
In terms of insurance, Franklin Township has addressed root factors that lead to insurance claims which in turn lead to premium increases.
The top four things Franklin Township does to reduce or eliminate claims are:
- Begin with good hiring practices and take care of their employees.
- Implement smart working habits to lessen the likelihood of injuries.
- Update and use equipment that eliminates workplace injuries.
- Partner with their insurance company.
- Maintain a good client/agent relationship.
To explore how this municipality focuses on practices that prevent workplace accidents and keeps an excellent safety record, I sat down with Franklin Township Supervisor Mr. Corbly Orndorff and Franklin Township Secretary Ms. Angie Riley to ask them more about the secret to their success.
1. Hiring wisely and treating employees well
“The Township’s greatest success has stemmed from the quality of its employees,” noted Mr. Corbly Orndorff, Township Supervisor. He could not state strongly enough the excellence of their workforce.
Throughout the years, Franklin Township has seen little turnover in its employee base.
Mr. Orndorff credits this retention rate to two things: finding quality people to do the work and paying them fairly.
Finding Quality People
Franklin Township is selective about who they hire.
They hire individuals with excellent character. Some of the traits they most desire in an employee are hard-working, honest, conscientious, and reliable.
The Township has the utmost respect and confidence in its employees. Because of their track record and work ethic, the township supervisors trust that their team will do the job well.
And doing a job well is a huge part of preventing insurance claims. As we all know, insurance claims lead to higher insurance premiums.
By having employees who know what they are doing, Franklin Township avoids all kinds of insurance claims.
Hard-working and reliable
Two important attributes of Franklin Township’s employees are that they are hard-working and reliable. So how does hard-working and reliable translate into excellent insurance outcomes?
One way is in regards to injury. By hiring hard-working and reliable employees, the township knows that if an employee gets injured, that employee will do everything they can to get back to work as soon as possible.
Returning to work as soon as the employee is released and able to do so is one way of reducing the cost of insurance claims.
Honest and conscientious
The other outstanding qualities of their employees are that they are honest and conscientious. This means that the township can rely on its employees to do the right thing even when no one is watching.
This is important in terms of insurance outcomes because following safety protocols is essential to preventing insurance claims.
Having employees who “do the right thing,” the township can trust that their employees practice good safety practices whenever they are on the job.
They can also depend on their team to properly maintain their equipment. By being conscientious in this way, the township is less likely to file insurance claims on that equipment.
And because their employees are conscientious, they can be counted on to do their work correctly.
Paying Employees Fairly
The other big piece in keeping high-quality personnel is paying them a fair wage. An individual who operates heavy machinery can find jobs with bigger construction firms that pay very well.
Knowing this, the Township has prioritized paying its employees a liveable wage. The Township Supervisors know that without adequate pay, heavy machine operators will look elsewhere for employment.
And because the Township needs skilled workers operating its heavy equipment, they compensate these employees according to the value they bring the Township.
Fair pay eliminates high turnover in employees, which leads to lower workplace injuries.
Employees that build a positive rapport with one another and have extensive experience in their job are less likely to have significant workplace accidents. And workplace accidents have an exponential impact on insurance costs, especially workers’ compensation insurance.
For every dollar spent on a workers’ compensation claim, you can anticipate that your workers’ compensation premium will go up 150% to 200% over the next three years. And there are also indirect costs to having injured employees like loss of productivity or training replacement workers.
By retaining great employees, Franklin Township has minimized workplace injuries.
The Importance of Retaining Great Employees
By focusing on keeping their experienced employees, Franklin Township has reduced their insurance claims. Having well-trained and knowledgeable employees reduces unnecessary mistakes.
And most work comp claims and other claims result from human error!
New employees are more likely to have claims than experienced employees. So, you can imagine that a constant stream of new employees would result in a greater number of insurance claims.
Inexperienced workers don’t know proper safety procedures, which can lead to significant claims.
Hiring well initially will directly impact your insurance claims.
It’s critical to employ people who know what they are doing, who are responsible, and who will do the right thing even when no one is watching them.
2. Working smart
During our interview, I asked Mr. Orndorff about their municipality’s success in terms of safety. His response was simple, “We work smart.”
After pressing him on what he meant by this, he explained that their team works hard and efficiently. They don’t stay on a job longer than they need to, and they only dispatch the number of employees required to do the job.
He explained how this effectively keeps employees from standing around on the job and possibly ending up in the wrong place at the wrong time. Because everyone is engaged in a task, they’re all aware of what’s happening around them.
Essentially, they’ve eliminated distraction.
They also work to get the job done. And once the job is finished, there’s no fiddling around to keep them on-site till the end of a workday.
With this mindset, their team doesn’t feel pressured to hurry and finish a job. And they have confidence in one another, knowing that their coworkers are also going to work hard and efficiently.
This confidence in one another leads to good morale among workers and loyalty to the township.
This is just another example of why making good hiring choices significantly impacts a municipality’s safety culture.
3. Updating and utilizing equipment
The supervisors at Franklin Township have regularly allocated some of their resources to the purchase of new equipment.
According to Supervisor Orndorff, “We have updated our equipment. Now we have two excavators and can rely on machines to do the work.”
By having two excavators available to their crew, Franklin Township has decreased their employees’ likelihood of being physically injured on the job. With skilled personnel running equipment, employees don’t end up with injuries from heavy lifting or back-breaking work, leading to strains.
And as mentioned above, workplace injuries are an enormous factor in rising insurance premiums. By using equipment, Franklin Township has prevented employee claims that would impact its insurance premiums.
4. Partnering with the Insurance Company
Many insurance agents don’t emphasize with their clients the importance of working with their insurance company and their agent. I can’t overstate how important these relationships are.
Working with the insurance company
Insurance companies want to help their clients manage their risks. If every customer they insured had large claims, the insurance company wouldn’t have the resources to pay out all those claims.
That’s one reason insurance companies “reward” customers that don’t file many claims with lower rates. And, to disincentivize customers from continuing to file claims, insurance companies raise premiums.
Insurance companies want to help their clients keep their claims low and create a workplace safety culture.
Some businesses, municipalities, or other entities are resistant to their insurance company. Rather than working with them to implement changes and address safety concerns, they resist the insurance company’s help.
Franklin Township maintains an excellent relationship with its insurance company, EMC Insurance. If the insurance company needs to complete a site inspection, the township welcomes them to do so.
And after the visit, the township addresses any problems the insurance company may point out.
Because the township has a proven record of safety and is willing to make needed changes, the insurance company is willing to negotiate with them and keep costs down.
5. Maintaining a good client/agent relationship
And just like working with the insurance company is important, having a solid relationship with your insurance agent is equally important.
Township Secretary Angie Riley noted that Baily Insurance has given them excellent service and spoke very complimentary of Betty Forman, their Commercial Lines Service Manager.
Ms. Riley remarked, “Betty is efficient. She is responsive to our emails and takes care of our claims quickly. Betty has a quick turn around when adding vehicles to our policy or taking vehicles off.”
And Mr. Orndorff also commented that Baily Insurance “is easy to work with.” He continued, “Baily is very responsive.”
And last year, when the Township was looking at a likely rate increase, “Mike (Baily) gave us a personal call ahead of time about the rate increase. He looked for ways to reduce the increases.”
By addressing the increase early, Baily Insurance had time to negotiate the rates and landed on a much more satisfactory premium amount.
In addition to negotiating the increase, we discussed work comp practices that the township could implement to reduce their work comp costs – practices like creating a physician panel.
Our agency is committed to sharing resources with our clients to reduce and control their insurance costs. And receptive municipalities like Franklin Township make it easy to maintain a successful insurance program.
EMC Dividend Program
Because Franklin Township has an outstanding safety record, Baily Insurance placed their insurance program through EMC Insurance’s municipality program.
The EMC Municipality program is unique in that its policyholders are their stockholders. Annually, their policyholders receive a dividend check from the profits that EMC made through this program.
As an agent who often works with this program, I have seen these dividends amounting to 10% and 20% of the premium paid each year. That results in a lot of money being returned to my clients.
This year alone, Franklin Township received a check for almost $12,000.
Mr. Orndorff commented that these annual checks have helped to offset any extra insurance expenses the township encountered.
Another benefit of this program is the steady pricing. Because EMC values loyalty, they reward the policyholders that stick with them by maintaining reasonably constant rates.
With steady rates, my municipality clients have been able to budget effectively for their insurance costs.
And because EMC is not all about driving up revenue for private stockholders, they can focus solely on what is best for their policyholders. This helps eliminate the struggle of balancing the needs of both their policyholders and stockholders.
One way they focus on their policyholders is by offering their clients loss control services.
EMC regularly sends out safety consultants to evaluate what can be done to prevent claims. And municipalities that do best in this program are those that implement the safety consultant’s recommendations.
One final benefit of working with EMC is their excellent claims service. EMC has in-house claims adjusters, which makes the claims process smoother and more efficient. With fewer people involved in settling a claim, EMC has a quick turnaround on resolving claims.
Is your municipality ready to write its own insurance success story?
Not all municipalities have enjoyed the success that Franklin Township has had. As I noted at the start of this article, most of the time, when we begin working with a municipality, we start by addressing problems they are experiencing in their current insurance program.
We help address safety concerns, HR issues like hiring, and other factors that have caused their insurance premiums to go up continually.
For most municipalities addressing these issues can seem daunting.
You might just be thinking that you could never address your underlying problems and reach the level of success Franklin Township has had at preventing and reducing workplace injuries.
But, don’t worry. I assure you there is hope.
Just like the Chinese proverb reminds us, “The journey of a thousand miles begins with one step.”
If your municipality wants to take control of your insurance costs, I encourage you to begin with just one step.
Our agency has developed a 15-minute assessment to help municipalities like yours identify your insurance goals and needs, gaps in your current insurance program, and factors you can focus on to improve your insurance results.
You can begin your journey by scheduling your free 15-minute assessment today.
And if you’re not quite ready for that, I’d invite you to take a look at a few articles from our learning center that address issues many municipalities face regarding their insurance program.
These articles explain the factors you need to address to reduce your insurance premiums and give ideas for practices you can implement to improve your insurance program.