Coverage for ARA members includes possible dividend
ARA Insurance, Kansas, City, Mo., has partnered with Meadowbrook Insurance Group, Southfield, Mich., to provide American Rental Association (ARA) members with a new workers’ compensation program.
“Workers’ compensation insurance, like health insurance, becomes very regional with different delivery systems. In certain states you can direct people to certain hospitals and in other states you can’t, so you need a national program with strength and we believe we’ve found that with Meadowbrook Insurance,” says Phil Kelling, president and CEO of ARA Insurance.
“Meadowbrook Insurance specializes in writing association programs and they have more than 30 such programs around the country. They also offer a safety dividend depending on claims, which can benefit ARA members who sign up for the program. Very few companies offer a dividend program, but we are able to offer this to ARA members,” Kelling says.
“Meadowbrook currently partners with many national and state trade associations to provide workers’ compensation programs for their members,” says Dan Tharp, Meadowbrook’s national sales manager based in Overland Park, Kan.
“We are excited about the opportunity and impressed with what ARA Insurance provides its members. Their strong focus on providing risk management to improve the safety at rental locations in addition to providing rental specific insurance coverage makes them a very good partner for this program. Their goal to manage risk and prevent losses will assure the success of this program as we move forward in this partnership,” Tharp says, adding that the program also offers dividends depending on favorable loss experience years, but that dividends are not guaranteed and are awarded at the discretion of Meadowbrook’s board of directors.
“Every year the results of the entire group are analyzed and, based upon those results, a dividend may be declared,” Tharp says. “The dividend is declared in the form of a percentage of premium paid. That amount is then sent directly to each eligible association member whose policy expired during the dividend review period. It is important to note that while the dividend is not dependent on the results of any one account, it is imperative that all association members remain diligent in providing a safe work environment for employees in order to ensure the integrity of the entire program.”
ARA Insurance started rolling out the program to its agents in April and now is contacting ARA members directly. By providing minimal information, a rental store can find out if it might qualify for the workers’ compensation program and what the premium would be.
Kelling says the premium for workers’ compensation insurance is based on payroll paid by job classification. For example, those who work in the yard or make deliveries would have a different rate versus a counter person.
Workers’ compensation insurance is mandated by law in most states and covers employees’ medical expenses and at least some portion of their lost wages if they are injured on the job.
Workers’ compensation is designed to help an injured employee quickly and economically return to the job without unduly harming the employer’s business. A worker whose injury is covered by the workers’ compensation loses the common-law right to sue the employer for that injury.
Kelling says rental stores are often lumped into a highly rated and expensive classification by those companies that offer workers’ compensation insurance because those companies do not understand the industry. By working with Meadowbrook, ARA Insurance hopes to educate the company about the equipment rental industry.
“We hope to get the company and states to better understand the business and develop a specialty. That way, classifications can be more focused because there are differences in rental stores,” Kelling says.
Kelling expects the ARA Insurance workers’ compensation insurance program to offer competitive rates, but in some states, which are highly regulated, the rates will be the same. Any dividends paid will make the difference in those areas, he says.
“The real difference will be in our service level and how well we handle the claims,” Kelling says. “We understand the unique needs of the equipment rental industry and what it takes to protect rental store owners, employees and rental businesses.”
The partnership with Meadowbrook also provides other potential benefits for ARA members. “Unlike traditional insurance programs, our goal is to partner with both the association and their members to assist in the prevention of workplace injuries and the unintended consequences that often accompany those injuries,” Meadowbrook’s Tharp says.
“We are able to offer association members superior coverage at an affordable price, but our partnership only begins there. With the partnership of the association we are able to offer members, regardless of their size, services that normally are only available to the largest of accounts,” he says.
For example, according to Tharp, every participant in the program will have access to services such as free safety gear and access to loss control services, including a full safety library to conduct on-site training for employees and industry-trained loss-control consultants.
To learn more about the program, contact ARA Insurance at 800-821-6580 or visit ARAinsure.com.
— Wayne Walley
Supporting the industry
In addition to the new workers’ compensation insurance program, ARA Insurance, Kansas City, Mo., a wholly-owned subsidiary of the American Rental Association (ARA), has designed a variety of coverages specific to help those in the equipment rental industry and to benefit ARA members. These include:
- No coinsurance on buildings or equipment. This removes doubt about how well property is protected.
- Trailers blanketed. Insured companies do not have to list each trailer on the policy individually.
- Rental equipment blanketed. Insured companies tell ARA Insurance the value of their fleet once a year to be insured at replacement cost with no cap per item.
- Flexible inventory replacement. Insured companies can replace destroyed or stolen equipment with any type of rental equipment.
- Loss of profit on equipment. This pays for profits that would have been earned on equipment had it been available to rent.
- Basket deductible. Only the highest deductible is applied to a single occurrence involving property, crime or equipment coverage.
ARA Insurance also has been instrumental in the development and promotion of tools to help rental businesses reduce risk. ARA Insurance funds the production of the following ARA products and also provides discounts or complimentary copies to ARA Insurance customers to help encourage rental stores to implement risk management strategies:
- Business Management: Contracts and Legal Guidelines.
- ARA Risk Management series.
- Ready-to-Rent tags.
- The Aerial Work Platform Statements of Best Practices.
- Work Safe safety meeting agenda sheets.
- Safety Training System.
- Equipment Service Record.
- Winning with Towable Safety.
- ARA Professional Driver Education Program.
For more information about ARA Insurance, call 800-821-6580 or visit ARAinsure.com.
— Maura Paternoster