RENO, Nev., May 6 /PRNewswire/ -- Too many small business decision-makers appear to be spending money on workers' compensation insurance coverage without understanding how workers' compensation insurance works, what they get for their premium payments, or why they continue coverage with a particular carrier, according to a recent national survey conducted by a leading workers' compensation carrier.

The survey by EMPLOYERS(R) found that a significant 14% of small business owners and executives could not name their insurer. In the survey, 13% admitted they do not understand how workers' compensation insurance protects employees with work-related injuries, or how their coverage can protect their small business's bottom line against catastrophic claims.

A significant number of small business decision-makers reported they rely on state funds. State funds are traditional, old-fashioned sources of workers' compensation insurance coverage first established in the 1900s to comply with laws requiring employees to be covered by insurance in the event of a workplace injury. Only 12 states continue to operate state funds.

Among survey respondents dissatisfied with their workers' compensation carriers, more than half use state funds. Survey results indicate that state funds appeal to many small business decision-makers who have little knowledge in terms of workers' compensation insurance and may be the insurer of convenience.

A related survey result indicated that 18% of small business owners who reported having selected a new workers' compensation carrier within the last policy renewal period were unable to recall the provider they switched to.

The survey by EMPLOYERS found seven out of 10 small business owners, partners, presidents and CEOs depend upon their insurance agent to explain workers' compensation coverage and pricing. At the same time, 58% of these decision-makers reported they consider choice of a work comp carrier a "hands-on" responsibility that is theirs alone.

First quarter 2008 results of the Small Business Market Monitoring Program were released by EMPLOYERS in collaboration with Profile Marketing Research, Inc., of Lake Worth, Fla. Data was collected through telephone interviews during the period December 2007 through January 2008 from a nationally representative sample of 400 small business decision-makers at companies with 5-49 employees. Overall survey results have a +/- 4.89 percent margin of error.

A quarter of all small business decision-makers who identified themselves as policyholders of a company of EMPLOYERS, America's small business insurance specialist.(R), said they consider themselves experts when it comes to understanding this vital aspect of small business insurance needs.

Price remains a deciding factor with 75% of decision-makers identifying it as their primary motivator in choosing work comp coverage. A total 69% ranked their carrier's financial strength as the second most important factor. A total 60% named claims handling as highly important in protecting small business operations in the event of an employee injury, and in helping to return valued employees back to work as soon as they are able.

Significantly, the single most important source for small business decision-makers interested in learning more about workers' compensation coverage remains their insurance agent. A 66% majority of respondents reported turning first to their agent when in search of workers' compensation insurance information. Twenty-two percent identified the Internet as their secondary information source.

The Small Business Market Monitoring Program is a semiannual survey measurement of workers' compensation insurance industry trends, conducted by EMPLOYERS, America's small business insurance specialist. Additional information and additional survey results are available by visiting http://www.employers.com. Findings from the next national survey period are scheduled to be released by EMPLOYERS in the third quarter of this year.

Copyright (C) 2008 EMPLOYERS. All rights reserved. EMPLOYERS and America's small business insurance specialist. are trademarks of Employers Insurance Company of Nevada. Workers' compensation insurance and services are offered through Employers Insurance Company of Nevada and Employers Compensation Insurance Company.

SOURCE EMPLOYERS

CONTACT:
Media,
Trish White,
Director, Corporate Communications,
+1-775-327-2636,
twhite@employers.com,
or
Analysts,
Vicki Erickson,
Vice President, Investor Relations,
+1-775-327-2794,
verickson@employers.com,
both of EMPLOYERS

Web site: http://www.employers.com