Risk Management for Small Business with John Morlan, an insurance and risk management industry expert with over 20 years of experience.

John shares his experiences with helping small businesses reduce their risks, creating safer and more productive work environments, and potentially reduce the ever-rising cost of business insurance.

John Morlan has been in the insurance and risk management industry for over 20 years. He started his risk control career with ISO (Insurance Service Office). After five years at ISO, he consulted independently for another seven years. During that time, he provided safety consulting services for some of the largest insurers in the country.

Next, he worked one-on-one with businesses to develop and implement safety and risk control programs. The result was a 50-80% reduction in their insurance premiums, saving them millions.

Most recently, he launched Smarter Risk, which has developed a self-serve app that automates the development of these programs. This solution helps small businesses adopt risk control programs that drive down claims, enabling organizations to qualify for the best rates and allowing insurers to offer premium pricing.

John is a huge advocate for small businesses. He understands their unique challenges and is passionate about helping them succeed.

John lives in Winston-Salem, North Carolina.

Risk Management for Small Business:

Episode Host: Henry Lopez is a serial entrepreneur, small business coach, and the host of this episode of The How of Business podcast show – dedicated to helping you start, run and grow your small business.

Resources:

Books mentioned in this episode:
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• ADKAR: A Model for Change in Business, Government and our Community by Jeffrey M. Hiatt

Related Podcast Episodes:

Episode 417: Ivy Walker – Risk Management

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Transcript:

The following is a full transcript of this episode. This transcript was produced by an automated system and may contain some typos.

0:00:15.7 HENRY LOPEZ: Welcome to this episode of The How of Business. This is Henry Lopes, and my guest today is John Morland. John, welcome to the show. Thanks for having me. John is with me today to share his experiences with helping other small business owners reduce their risk, the risk in a business by creating a safer and more productive work environments and potentially an opportunity to reduce those ever-rising cost of business insurance. He’s an expert in this area, and so that’s what we’re going to explore. His expertise and an app that he has developed that helps business owners with this, to receive more information about the how a business, including the show notes page for this episode, and how you can continue supporting my show and receive exclusive content and discounts through a Patreon membership this visit the Howes dot com. I also had encouraged you to please subscribe to my show wherever you listen, so you don’t miss any of the new episodes, so let me tell you a little bit more about John. John Morland has been in the insurance and risk management industry for over 20 years. He started his risk control career with ISO Insurance Service Office.

 

0:01:31.0 HENRY LOPEZ: After five years at ISO, he consulted independently for another seven years, and during that time, he provided safety consulting services for some of the largest insurers in the country, next, he worked one-on-one with businesses to develop and implement safety and risk control programs. The result was a 50 to 80% reduction in their insurance premiums, saving them millions of dollars as you might expect, most recently, he launched smarter risk, which has developed a self-serve app that automates development of these programs that we’re going to chat about, this solution helps small business owners adopt risk control programs that drive down claims, enabling organizations to qualify, potentially qualify for the best rates, and allowing insurers to offer a premium pricing. John is a huge advocate for small businesses, he understands their unique challenges and is passionate about helping them succeed, which is why he’s here with me to hear… Here with me today. To share this knowledge, John lives in Winston Salem, North Carolina area. Once again, John Morland, welcome to the show

 

0:02:43.8 JOHN MORLAN: Thanks, I am really happy to be here and talk about this.

 

0:02:46.9 HENRY LOPEZ: Yeah, excited to chat about it, but before we do, so, I’m always interested in the journey, how you got to where you are today, so I was hoping we can start by, if you would share the Early Story or your career… If I did the research right, you went out of college into insurance and risk management, as I highlighted in your bio. Tell me about that. What got you into that field to begin with? I’m curious.

 

0:03:12.1 JOHN MORLAN: That was kind of by accident. Which is funny, if you listen to some of the inside baseball insurance podcast, most of us got here by accident, Eritrea. We didn’t say, Hey, let’s go into insurance, this sounds fascinating. That’s not really what happened for me, so I actually went to college later in life, but yeah, I was recruited by Mutual Omaha to sell life accident and health insurance, and that was my first experience with the insurance industry, I was really a terrible sales person, so this is why we built an app that’s pot, by the way, but I was not a great sales person, try selling life insurance, I mean, it’s really hard as you would think it’s easy, it is not easy to sell like a turn… I did that for a couple of years, moved on, got hired by a company called Sentry insurance, and they were commercial outfit, so that was my first experience with commercial insurance, so we sold workers property liability, what we call pot policies, and small fleet exposures, and I did that for about a year, year and a half, I got laid off. And this was during the downturn, 2001, and during that time though, something really interesting happened, when you start selling commercial insurance, you get visits by these people called Risk Control, or sometimes it’s called Lost control in the industry.

 

0:04:28.8 JOHN MORLAN: And what they do is they come in and they make an assessment of your account and they report back to the insurance company, Hey, this is the risk that this company is transferred to you, ’cause that’s all really… Insurance is right. It’s just a transfer. And I actually would get these reports, my accounts did not do very well ’cause I didn’t know anything about risk and from risk management… At that point, they did not do very well, but I was fascinated. I went the pot, what they did. And so I harassed a gentleman at ISO for three years, Walton, be super nice guy, retired now, and I Raskin for three years, and he gave me a job with if… And when I got the job, I was very fortunate actually, they had just started a mentorship program where they would take new young consultants, I was 25 years old at the time, when I got hired on is, and they would put them with a mentor in an industry expert. And that mentorship program lasted for five years. Wow. Was it… Tent was really great though. I’m actually still friends with Bruce to this day. We still go to lunch when we can, but yeah, it was just a really great experience.

 

0:05:31.8 JOHN MORLAN: I learned a lot, I got to learn under Bruce, he was 40 years in the field, and that really started my career and that was probably… That was the thing that set me off on the path that I’m on now, but yeah, so it was just… It was a great time. I did my five years and I went and consulted independently for seven years, and I really enjoyed that, but I will say at that point I kind of… I hate to say burnt out, but I did sort of get burn out, it was kind of the same thing I was to say…

 

0:06:01.6 HENRY LOPEZ: Same thing over and over.

 

0:06:03.0 JOHN MORLAN: Yeah, well, it was a lot of small… In what we call mid-market, it counts, and that’s just small, medium-sized businesses, but these were a lot of mom and pops, and it was… And don’t get wrong, some of it was great, if you ever want to get someone talking, sit down there of they had to start this business to get prepared to be there for a little while. But that was my favorite part of it, is I would meet people and they would tell me their stories, and they would always tell you two stories, business owners, they always wanna reminisce about how they started their business and how they met their spouse… Those are two things that are always gonna tell you, and I did love that part of it out back to the burnout part. But I would go and visit his accounts and I would always give them a laundry list of stuff they need to change, and the response was always the same in a lot of cases with John, I know how to build a widget. I don’t have any idea how to build a private blood-borne patina program, or how to set up a lock-out tag-out policy.

 

0:06:57.2 JOHN MORLAN: I don’t know how to do any of this stuff. Can you help me? And the answer was always the same. No, that’s not what the insurance carrier passes to do, they pay to just give you recommendations, gives you some guidance and you just have to build the program yourself, but I always felt kind of like a half-hearted answer to me… The other thing that was frustrating was it felt like theory, every time I would go and work with a company, a lot of times I didn’t know how it turned out if the carrier didn’t send me back, so did they implement the recommendations? Were they successful? Did it, did it help them? And so I got an opportunity to go and work with some companies to implement risk control and safety programs, not just recommend them, but actually implement them, and I was pretty good at it. So I just give you one example. One of the first companies I worked with, I saved them a quarter of a million dollars in their workers comp insurance in about 15 months. Now, when I say that, that sounds like a lot, and it is a lot of money.

 

0:07:45.4 JOHN MORLAN: But they were in a really bad take when I walked in, they had a lot of problems, so it was, I shouldn’t say easy, but after 15 months of just continuous implementation, we implemented the right programs, we put the policies and procedures that need to be in place, they reduced their number of claims, and lo and behold, their insurance premiums went down, and so then I took that and went and worked with some other companies and helped them reduce their insurance as well, and so I guess maybe I could go off maybe on a tangent here to tell you, what gave me the idea for the app… Yeah, absolutely. Well, so during this time, I’m kind of a computer junkie, and so I was building computers for friends and families, I’m always gonna take junkie, I always love technology, I always been obsessed with it, and I think it was when I was a kid, my mom gave me this book, it was, the life have been Franklin, and I was always fascinated by this guy, here’s a guy who everything was an experiment and things that were inefficient. He wanted to figure out how do we make them more efficient.

 

0:08:45.2 JOHN MORLAN: And then I was a kid, I read books, Tesla, Henry Ford, and I was just really fascinated by these gentlemen who would see the world and say it can be different, it should be better. And when I was in risk control, I worked for ISO and then even independently, I was always working with companies and I was like, This is a really slow manual way to do it, and it’s like 2009, right? And it’s like, Should we… Shouldn’t we be doing a little bit better than we’re documents just floating around the internet or whatever, so I was always obsessed with making things faster and more efficient, and I said even at the time, there’s kinda be a way to build an app to do this, so that small business owners could do this themselves, it could all be self-directed, they could have the tools they need to reduce their risk and the net… The savings, right? Because they’re the ones that can least afford the high insurance rates… Right, right. That’s probably a little bit longer to

 

0:09:38.9 HENRY LOPEZ: This great stuff, and it’s so much of it is the typical stuff that drives an entrepreneur… Right, certainly you started in a career where you have to be self-directed in sales, so I always think that that is one of the… A lot of people who do sales are somewhat preparing themselves because it’s on you, you either do or you don’t… Right. There’s no excuse. And so that’s a lot where it is in business, but then this curiosity that you have, and as you put it, this desire to fix things that you observe or not working, an optimal rate that are broken, that’s another characteristic I see in a lot of entrepreneurs that you had it just naturally in you, right, that that drove you, that feels you as to try to solve those problems. It sounds like… Oh yeah.

 

0:10:30.1 JOHN MORLAN: Yeah, absolutely. It’s kind of like when you see things from that perspective, you look at everything and you get a little frustrated because he’s like, Why isn’t this… Why does this work better? I remember, and this is one thing that made me think about our industry, I was watching CNBC or one of those shows, and this was probably 20-10, and they had someone on and I can’t remember who it was, it was an investor, and he said, Look, he said, every company in the future is going to be a technology company, and he didn’t say May or he was definite like this, they will be… Every company will be a technology company, I don’t care what they are, and that was an interesting thought, and if you look at the world today, over time, he was right. Like for example, I know I’m a Hilton guy, so I used to travel a lot for work. And I would always stay at a Hilton probably… Well, they have an app where you can book your stay, you can check in, you can turn your phone into a key, it’s a digital key, they’re up… Tell company, right? It’s a digital key, you walk up and you open your room, and then when it’s time to leave, you click a button and you check out…

 

0:11:36.1 JOHN MORLAN: It’s the most amazing thing ever. But they’re a hotel company, but not really, they’re really… They’re becoming a technology company, and there’s a bunch of examples of this where the world is changing rapidly, sometimes there’s a resistance to that change. I think back when I was in maybe… This was late 90s, early 2000s, when… I don’t know if you probably remember this, we’re probably about the same age, but back in early 2000s, there were these high school and college kids that kept downloading music, remember that type of course, and the industry just wouldn’t change, it almost had to… It was forced upon him, but what was interesting, Steve Jobs was like, Look, no, we need to be on the internet, this is a much better model and we’ll sell it for a dollar or song, especially ’cause at the time they were trying to get kids to stop downloading it for free, right? Right. So I think we’re just… We’re fast approaching the time when every company in their business plan out of the gate, they’re gonna have to think about with What technology am I going to… An employee to be able to compete, right? Yeah, am I gonna have to do…

 

0:12:41.0 JOHN MORLAN: I’m in an accelerator program, and I was thinking about… I was talking to a young lady there, she has a yoga studio. Right. Well, one of the things they really need is they need an app so that people can schedule their yoga sessions right front of the yoga student, she’s gonna need technology, and it’s just the way the world is going, and I think… Honestly, I think it’s pretty exciting.

 

0:13:00.0 HENRY LOPEZ: Yeah, no, I think it is to the challenge or SAS business owners now, of course, is we have to learn all of this, we have to figure out how to apply it, we have to be careful with how much we spend on these things and what makes me sense, but I think what you touch on is that also that lack of fear that you had to have a trial and error of trying things and figuring things out and seeing what worked and what doesn’t work, so smarter risk, technically, I think was your first business, but really, you were doing consulting, so you had been on your own before… Right, that’s correct. But smarter risk is kind of your first formal company.

 

0:13:36.6 JOHN MORLAN: Is that correct? Well, no, not in it now, I did for a short time have a restaurant, bar, music venue to… I did, yes. And that was a really good learning experience if I had a mentor capital very quickly, so that was back in 2010, so I was still consulting, but I was also operating… I’m the big music junky too, so I wanted to do this and it was fun at first, and then it got really, really hard, but I learned a lot about the execution. You know, at that point, I’ve been doing consulting and I’ve been in insurance or risk management at that point for nine years. I want you to ask me, and I probably shouldn’t say this because I’m like the plumber with the leaky fault. How many policies and procedures and documentation do you think I had in place as a restaurant.

 

0:14:28.0 HENRY LOPEZ: So don’t tell me you didn’t have any… I

 

0:14:30.2 JOHN MORLAN: Didn’t have anything on… I’m gonna admit that on your show, Adnan, I’ll tell you why, I didn’t have the ability to… It’s not that I didn’t have the time to just… Was part of the problem, I had the skill set to do it. So that also made me think, Wow, if I had the skill set, but not the time, how many other small business owners are dealing with is right, even if they have the skill set, they wouldn’t have the time and most don’t have the skill set… Right. Meeting, I’m sorry. No, no, go ahead.

 

0:15:01.2 HENRY LOPEZ: Completely. Well, related, but unrelated. You sound like similar to myself, one of the challenges that I have is what I call a shiny object syndrome, where I’ve been opportunistic about my businesses, but sometimes that gets me in trouble ’cause I go off on tangents or businesses that aren’t related. How do you manage that for yourself, how do you decide, I’m not gonna go chase that thing, I’m gonna concentrate on this thing…

 

0:15:28.4 JOHN MORLAN: Years of being beat up. And that’s the only way I can describe it. No, I suffer from the same… Been the same disorder, I guess. I don’t know if you were to call that A is, but we can call it a disorder, do not suffer from that too, and I think some of it’s age, maturity as we get older, we’ve learned to focus our energies more, and we also figure out what we’re good at. And so over the course of my career, I’ve just figured out what I’m good at and what I’m not. And I try to focus really on those things that I’m good at, and I also try to decide, okay, long term, what is it that I wanna accomplish, and then what are the steps it’s going to take me to get there? And then be as ruthless as I can about getting to that finish line, then once I get there, then I can make an assessment say, Okay, what’s the next step, what’s the next big marker I wanna get to, and that’s just kind of how… It’s kind of funny, this app, I actually tried to get it off the ground in 2012 to put together, so I put together some developers, and after about six months, the whole project fell apart, I didn’t really know how to build the app, I didn’t really know how to make it work.

 

0:16:33.1 JOHN MORLAN: And fortunately, and this was about four years ago or so, I met a gentleman who was a developer and I said, Hey, I’ve got a project and I need a developer, and he said, Well, I’m a developer and I need a project that’s made in… Have a perfect, perfect connection to us.

 

0:16:48.7 HENRY LOPEZ: Or we can talk about this forever, but let’s start diving into it, and the question I think we both agree might be a place to start is by you explaining what is risk control, what are we talking about there? From a small business owner’s perspective, what is it that we’re talking about typically? So

 

0:17:04.9 JOHN MORLAN: With risk control, and I would give you the textbook definition, but that’s not gonna help, but I will say for those listening, risk control is often, it’s sit in the same breath of safety, right. So a lot of times people think that it’s anonymous, but it’s not a… Safety is really a part of risk control, so what we’re focused on is insurable risk, so let’s say, for example, there is an employee or risk, there is a risk of employee getting hurt, that’s insurable under workers comp, so that’s where the safety comes in, but there are a lot of other things that businesses are exposed to that a risk, like for example, you’re building to burn that… Right, well, what do you have for that? You have fire insurance or your employee could be in a company vehicle and get in a car accident… Well, that’s fleet insurance, right? So when we look at risk control, we’re looking at identifying what the hazards are and what are the controls in place for these various things that could affect your business, all the things that are what we refer to as insurable risk. So it’s much broader. And just safety.

 

0:18:02.6 HENRY LOPEZ: Yep, yep. Great, and as you were saying that, I always thought that that’s one of our responsibilities as we wear the CEO hat in a business, is to mitigate, is the word I use to be aware of for see what those risks might be, what those hazards might be, and how we control them or mitigate them, that’s our responsibility as business, and one of our primary responsibility of business owners, isn’t it…

 

0:18:29.0 JOHN MORLAN: Yeah, that’s right. And if you can’t mitigate the risk, if you can’t eliminate, Get rid of it, how do you effectively manage it and that they use… Example of that is PPE, personal protective equipment, when you wear a hard hat, that’s because sometimes you can’t mitigate all the risks of an object falling on your head if you’re in a construction site. Right, so our last line offense is PPE. So that’s when we try to manage it.

 

0:18:51.9 HENRY LOPEZ: So based on your experience, and you’ve touched on some of these areas, but what are some of these common risk areas beyond the obvious that we might overlook or that we might think, like you said, ’cause I hear it a lot of the… Well, we just always done it that way, so… Watterson said

 

0:19:10.0 JOHN MORLAN: That to me. I can imagine. Yeah, yeah, answer your question. I think just a few things pop in my head when dealing with the certificates of insurance, this is often overlooked, and this can hit you in a couple of different ways, premium on it, which I’m not an expert, premed, but definitely hurt you on your premium on it, but when it comes to liability, You wanna make sure that subcontractors are properly insured, and so what you should do as a company is set a policy up that says, Hey, here’s our minimum standards, we require half million million, whatever it is, of insurance from a contractor. Do you sell the coverages that are required, and also we want additional insured status, and so additional insured status is pretty interesting, most people miss this, but let’s say you have a roofer who’s doing a long-term… It’s a long-term contract, say they’re gonna be on your roof for six week, you gotta be a big building, and we… To their insurance is came… Well, if you’re listed as an additional insured on that policy, you’ll get a notification, you’ll know now that they’re an uninsured contractor, so pretty important that you do those kind of things, but that’s something that people often miss the same way with safety orientation.

 

0:20:18.1 JOHN MORLAN: That’s another big one I think, business owners, I’m always talking to him about is, Hey, whenever you’re trying to create a culture of safety… And this is always a big question. How do you create a culture? Start with orientation. If you wait six weeks, let’s say you hired someone, you wait six weeks or two months and you’re like, Oh yeah, let’s sit down and talk about safety and what the safety requirements are, how seriously do you think that employee is gonna take you… Not very serious. Not at all. So I’ve always said that you want a very well-documented regimented safety on important, you wanna make sure this employee knows upfront, these are the clear expectations, and that will make the biggest impact on your safety culture, I think more than just about anything else.

 

0:21:00.5 HENRY LOPEZ: Making it part of that onboarding program, not something that happens later or as an afterthought, but part of the onboarding and as soon as possible… And you’re saying that not only does that and documenting it, I’ve always understood is a big deal, so that I can show that I did provide this safety training to this employee, not that they didn’t know how to do something correctly or avoid a hazard situation, but what you’re saying is that it sets the right tone for that employee is to how important that is? In this environment.

 

0:21:35.1 JOHN MORLAN: Yeah, absolutely, and you know, some small businesses struggle with putting together these safety training programs, ’cause they’re expensive. Right, and I’ve often told him, Hey, do a document on the job safety training, so to it… So yes, what we call a job safety observation, train someone on how to like say you use a piece of equipment, then have them demonstrate they can use that piece of equipment safely fell out the job safety observation and final it. There you go. Now you got a documented training program.

 

0:22:04.3 HENRY LOPEZ: Don’t you use that with other employees, you mean that you follow… Now you follow that same process to damage others, for others, to demonstrate they know how to operate something correctly, let’s say…

 

0:22:17.2 JOHN MORLAN: That’s right, yeah, and then you just keep it in their employee file to prove.

 

0:22:21.8 HENRY LOPEZ: That not only did I give them the training, but that they demonstrated knowledge of that safety process or procedure… That’s right.

 

0:22:29.1 JOHN MORLAN: So if you ever have your insurance carrier asking about a claim or if you have OSHA coming, you can pull that out and show them that documentation, Hey, look, you know that excavator is very dangerous, we know it’s dangerous. We have someone to train them on it, we do a job safety observation, they demonstrate they can operate that piece of equipment safely, and then we file that in their employee file, now that’s not as good as having some really nice regimented safety training program, but if that’s out of your budget, if you’re a really small business, and that’s all you can do, do it.

 

0:22:57.2 HENRY LOPEZ: Because if we follow that route, what an agency like OSHA, wherever else is investigating, what they’re looking for is, did I have any kind of safety program in place that I provide this employee any type of training on how to be safe in the usage of this space or a piece of equipment or whatever the case might be, that’s partly what they’re looking for, right? That’s right.

 

0:23:19.4 JOHN MORLAN: Yeah, you wanna… That you are a responsible employer and that you took some steps to make sure that that employee was reasonably saved.

 

0:23:29.1 HENRY LOPEZ: You said in another interview that I listened to, or maybe it was on your website, to the easiest way to get better insurance rates, which is probably what we’re talking about here, the easiest way to get better insurance rates is to not have claims that seems very obvious but that’s at the end of the day, that’s where we’re hoping to minimize so that our rates don’t go up, not to mention… To keep them low. Right, that’s right.

 

0:23:51.4 JOHN MORLAN: Now, it’s funny, I can’t remember where if I wrote that or that was some interview questions, so… But I actually had a business owner who I was talking to, she laughed at that and I said, No, I’m serious. But the right programs in place don’t have claims and your rates will go down… That’s just how it works. It’s not Rock science.

 

0:24:09.6 HENRY LOPEZ: Yeah, it’s a matter of perspective, isn’t it? Because we, I don’t know, maybe in the past, we might have been able to look at insurance as, Oh, that happens still, but that’s certainly immediately how we’re either not gonna be insurable or I was gonna increase our cost is to not file a claim. I’ve come to look at most of these policies is what I call… Maybe it’s the wrong term, catastrophic coverage in other ways, need it because I would be out of business if I had to cover a true loss, but the idea is to not file unless I really need to and to avoid having to file… That’s right.

 

0:24:46.7 JOHN MORLAN: No, that’s exactly right. You wanna try to avoid it claims at all cost, because you will keep your insurance costs down if you do that, I really Ossian say that it’s harder than that now, it is harder to do the assessment, put together all the various policies you need to have the documentation in place, that is harder to do, but as far as just doing it… That you just wanna watch you 40 returns at the end of the day. That’s why the insurance company spent 9 billion a year on risk control, they do it because they know the probability is that the more risk control assessments I do, so more recommendations they give to two business owners and the more of those recommendations that are implemented, the less likely claims are, and so that means more underwriting profit, they’re in a business just like… Everyone listening to this show, right? And so do what the insurance companies there…

 

0:25:42.7 HENRY LOPEZ: This is an relapse briefly pausing this episode. To invite you to schedule a free coaching consultation with me, I welcome the opportunity to chat with you about your business plans and offer the guidance and accountability that we all need to achieve success as an experience, a small business owner myself, I understand the challenges you’re experiencing and often, it’s about helping you ask the right questions to help you make progress towards achieving your goals, whether it’s getting started with your first business or growing and maybe exiting your existing small business, I can help you get there to find out more about my business coaching services and to schedule your free coaching consultation, please visit the holiness dot com, take that next step today towards finally realizing your business ownership dreams. I look forward to speaking with you. See, so start to explain to me how the app helps me… This app that you have developed, walk me through how it is that it helps me identify these opportunities.

 

0:26:46.0 JOHN MORLAN: So the app is develop it… You really in two parts. So let’s walk through the first part, we built what we call a self-assessment tool, so we wanted to build an application where a business owner could go in and very quickly assess their own risk, and so that’s what it does. The first part of it is an assessment of risk assessment, you go in, it asks you questions, depending on how you answer those questions, it’ll ask you additional questions or it’ll skip questions. It’s pretty smart. And then at the end of that, it’ll give you a roadmap for improvement, these are our list of recommendations, it’ll also give you a score, so you have some guidance on what you need to do to improve your risk.

 

0:27:24.6 HENRY LOPEZ: And how does it account for different industries or different types of environments, how does it account for that job…

 

0:27:31.5 JOHN MORLAN: Well, so it’s gonna ask questions and then you’re gonna tell it whether that exposure exists, for example, it’ll ask you, Do you perform welding? Right, if you perform welding, then it’s gonna ask you a bunch of additional questions, Hey, do you have a hot work permit program, do you have designated welding areas? Are you providing PPE? Are you enforcing the use of the PP, so it’s gonna ask you all those kinds of things, and if you say no, it’s gonna skip all those additional questions, you can take you to the next question. When we did beta testing, a typical risk assessment, start to finish, to visit with an insured business to write up the report and to create all the recommendations would take anywhere on a small account three to five hours. The beta testers I had, and I’ll give you three examples. One was an account at a machine shop, another was a lady here in town who owns a chain of restaurants, another was a gentleman who had a micro-bury, it took all of them. Now, none of them have any experience in risk management safety or insurance, maybe the accountant might… He reviews the insurance once a year, but that was about the extent of it.

 

0:28:29.9 JOHN MORLAN: It took them 15 minutes to do the assessment, takes 15 minutes.

 

0:28:36.0 HENRY LOPEZ: And so I answer the questions, and then What happens… What does the Apptio… It generates what we call a road map for improving, these are a list of recommended is a list of recommendations that will tell you, Hey, if you don’t have this policy in place, this is the policy that you need to have in place, and these are the requirements for that policy. So that’s the first part of the Amity requirement should be like the key components, perhaps they have to be in on policy… That’s right.

 

0:29:03.6 JOHN MORLAN: Exactly right. It’ll tell you the key components you need to build that policy now, and I don’t know if we wanna get the pricing model now or not, but

 

0:29:11.2 HENRY LOPEZ: I… Estates, all of that is free. And I say, So what is the paid part where… Why would I pay for the follow-on part of it?

 

0:29:20.2 JOHN MORLAN: So you’ve got two options, so let’s say you just wanna go on site, assess your risk, get a score and get your recommendation, so you know what you need to improve, right. Do that for free. But let’s say you want the ability to update your recommendations, which is basically you… It’s a little thumbs, you click on it and it says, Hey, we’ve implemented this policy, that right there will improve your score, but also the report is dynamic, so the report itself, you can also generate a report, it’ll change the report, so the report updates as you update your recommendations, we’ll charge you a 10 one-time fee for that. And with that report, once you get your score where you want it, you implemented all the recommendations, you’re seen as a good solid risk, you can generate a risk report which is going to outline all the proactive measures you’re taken to control the risk, very similar to risk reports that I gave insurance companies for years, you would generate that and then you can share that with your agent and then have your agent… What I would do is have it put it together with an RFP and send it out to three carriers and get quotes, and instead of your agent go in to the insurance company and saying, You know Bob’s a really nice guy, you guys should give him the best rate, which is funny because a lot…

 

0:30:30.3 JOHN MORLAN: I hear not a lot, but I hear some agents are like, Oh, let me just quote it, look… But why would it insurance care give you a better rate? What’s the rationale? Well, there isn’t much… Most of the time how these rates are, how they come up with rates is they’ll take what they call loss ratios, they’ll look at their loss ratios as their insurance company and then industry-wide losses. And that’s how they come up with a pricing. And that’s why some of the pricing is a little bit different from one carrier to another, but what I’m suggesting is that you implement all these proactive measures, and I’ve done this in the real world and it works, you make sure that your insurance carrier knows about all these proactive measures, then you have them give you a quote, have them give you the most competitive quote, they can tell us…

 

0:31:13.9 HENRY LOPEZ: Yeah, and of course, there’s no guarantees here, but based on your experience, and you’ve been doing this now long enough, the way that you’ve the comprehensiveness of this risk report, the way that is formatted, it will be considered or should be considered by an insurance company as they’re looking at how to evaluate me individually in my business, when I share with him this risk report… That’s right.

 

0:31:39.9 JOHN MORLAN: That’s exactly right. And just, I won’t name the company, but there was one company I was part of a team, and we did the very same thing. I’m suggesting it wasn’t automated, we didn’t have an app to do it, we did it ourselves, and the saves with 21 million. So related to that, is there… Spending a lot too.

 

0:32:00.2 HENRY LOPEZ: So yeah. Exactly, that’s why it leads me through this question of… Where is the sweet spot? Yeah, so most of us listening here are our micro-business owners, do you kinda have a general range at what point this makes sense or not, size-wise as a number of employees, what is the factor that I should consider to think this might make sense for me?

 

0:32:23.1 JOHN MORLAN: Well, I’ll tell you what, I’ll answer that question. No, I go back ’cause there’s one other thing that we’ve got, we’ve got a subscription product too, but I’ll explain that in just menteith sweet spot is anywhere from five to about 1000 employees down, our software could be used for up to maybe 2000, but our leaflet me give you an example, say, a 5000 employee chemical plant. They can’t use our software. It’s not designed for them. They need something super complicated, right, and they’ve got stuff out there, they use these really high-end SMS, which are safety management system, they’ve got an entire staff.

 

0:32:55.3 HENRY LOPEZ: They’ve people on staff doing this…

 

0:32:57.4 JOHN MORLAN: Yeah, we’re focused on really small businesses that either can’t afford a safety or risk management guy, right. But they also can’t afford to pay the insurance rates their pants, so we’re… We’re really looking for those kind of businesses that will access the app, ’cause this is like very similar to having a safety or risk management person on staff, it’s a good in-between before you get to that level where you’re like, Okay, it’s time… We’ve gotten 1800 or 2200 employees, or 2200 employees are… We’ve gotten 500 were on numbers, and that’s gonna change too, depending on what kind of risk you’re involved in, right, if you’re running a machine shop versus a restaurant, so that’s all gonna vary, restaurants don’t ever have safety people on staff, but the app really is designed for small businesses that make things… Move things and sell things. So these are warehousing machine shops, repair shops, would workers, cabinet, restaurants, hotels, or service businesses, start contractors to… Any contractor that’s got a physical office location, now we do have an upgrade saying out… Great. A different version, the act coming out probably in the next quarter, and that will be for super micro businesses, so think about your landscape, and it’s got three employees, but they don’t have a physical commercial location, so we have something for them too soon now, but the assessment covers property liability, small fleet, if you have one, if not, you can obviously tell it, you don’t have a small fleets, kittens and workers come, so those are the things that it focuses on.

 

0:34:27.0 HENRY LOPEZ: Got it. And then you were gonna explain the subscription model…

 

0:34:30.8 JOHN MORLAN: Oh yeah. So the subscription model, so when you talked about for 10, you can update your recommendations, and that’ll update your score and that also update your port, ’cause it dynamically generates, but let’s say you look at some of these policy recommendations like blood born passion or lock at tag at are trenching and excavation or any of these other policies that typically take a while to develop in a lot of companies spend six months in endless meetings trying to develop these policies, going on Google seems they can find a good template. If you don’t wanna go through that, we have a subscription product, as we call it, The Risk Manager, and it provides you a policy builder and a form fiber, so now you have everything you need to implement the policies, to implement those recommendations. So if you need audits or inspections, that’s all in there, and if you need to build policies, it literally will take you anywhere from 30 seconds to about three minutes to build one of those policies with our policy builder, and we charge 500 a month as a subscription, product and it’s a 12-month commitment.

 

0:35:32.2 HENRY LOPEZ: Yeah, I think that’s the huge part because I see that’s where people… It seems simple, but yet what I find with a lot of small business owners is they just don’t even know where to start with building policies or to the point you made is a great one, where people start having… Well, should it be this? Should we do it this way? Should we do it that way? And nobody agrees, and then we get nothing done right by using a template, a starting point, a tool that helps me develop it, it helps to be jump started, nothing else to process to get something in writing something in place.

 

0:36:08.1 JOHN MORLAN: And these are really robust policies, we took a long time working on that part of the app, we wanted to make sure these were really, really nice policies, we didn’t want some two-page template that we would give people… Some of these are pretty robust, I think there’s a few of… Are 60 pages. So if you include the appendix, so they’re pretty robust policies, we want to make sure we tried to cover everything we could, but the other part that’s really important is the assessment, because a lot of times for small business owners, you can go on a safety side and I bet we got BBP training. We got my WP training, we got all these acronyms and they’re like, I don’t even know what I need. And so the beauty of the assessment is, what happens is the application, as you answer these questions, it builds a risk profile, and based on that risk profile, that’s where your recommendations come into play and say, Hey, you’re doing this, but you need to do this, that’s how your report is generated, that’s how we tell you which policies you should be producing, so all of that comes from that assessment, so the assessment is really really the key.

 

0:37:10.3 HENRY LOPEZ: Okay, and you’re talking about the initial component of the app, the assessment, the questions that I answer to walk through the app and answer the questions… Yeah, that’s right, and that’s the part is free. That’s right.

 

0:37:23.3 JOHN MORLAN: And the beauty of that too, if we can’t help you, if you take the assessment, you’ve lost 15 minutes, right. But I would, I would bet any one money, that if you’re a small business, if you do that assessment, we’re gonna find something you should improve… I’ve been doing this a long time.

 

0:37:38.4 HENRY LOPEZ: I… I believe it is. There’s no doubt about it. One of the things I see always with these types of things with developing policies and procedures, certainly as it relates to safety policies and procedures, and we’ve all been in environments where we might have a fantastic policy, but it’s gathering dust on their shelf, nobody follows the check out process, let’s say a ache out process, but it’s there as documented, what have you seen as a best practice to implement these policies once I’ve developed them and make sure that they’re used consistently.

 

0:38:11.2 JOHN MORLAN: Typically the first thing and the best thing is to make sure that people are trained on a regular basis, so they know what the requirements are, right, and that includes management because often, like you said, it’s been 10 years since they’ve updated the policies, and that’s one of the ways we ask the questions on policy. Do you have an up-to-date written policy for X, Y or Z, whatever the question is, because we find that a lot with small businesses, if they have at some point hired somebody who’s like, Oh, I’m a great policy writer, and they write them a policy or Please find of a template that was 10 years ago, so… But then training employees and training management on what the requirements are in that policy, ’cause policies just says, this company, this is what we’re gonna do, right, then you’ve got procedures, this is how we’re going to do it, and then you’ve got training to make sure that people understand what’s required to them and then you hold them accountable, and that’s just… Those are pretty important parts, and I think just some of the organizations I’ve worked in, that was one of the things we had to get really clear on, is that when we put these policies in place, we were going to train people so that they knew what they were…

 

0:39:17.8 JOHN MORLAN: And then we were going to hold them accountable for doing that, that… That’s employees. And that’s also managers, aerosol Tel. I remember we rolled down an onboarding process for one of the companies I was working with, and I was a complete disaster, and I tried to tell them it was going to be a complete disaster because they forgot one thing, there was no accountability component. And guess what, a year and a half went by. No one was following me on the safety on-boarding process because it was in a PDF document where they would print it, check it off, and then it would float around and inboxes to HR somewhere, and someone was supposed to pick that up and supposed to print that and supposed to put it, it never happened. So a year and a half after this, I said, Hey, why don’t you just let me fix it for you. And I worked with a developer and we built a form that was part of an SMS at the time, and the safety management system where it could be accessed anywhere at any time in the safety team, and anyone in upper management could see if each location was actually doing the onboarding, not guess what happened with onboarding, it started getting done, Emerson started doing it because there was an accountability component…

 

0:40:27.4 HENRY LOPEZ: Yeah, yeah, yeah, no, that’s gotta be the key to it, and then ideally, it becomes part of your culture, it becomes part of just how you do things, and that’s when you really have made it part of your company is… Absolute. Anything else that you wanted to share is… So you mentioned where you’re going as far as smarter risk for smaller companies. And anything else we didn’t talk about that you wanted to share about smarter risk?

 

0:40:51.6 JOHN MORLAN: Yeah, so we do have a couple of products coming up, we will have a micro learning app, I don’t have a date for that yet, so I don’t know if anyone’s familiar with micro-learn, but that’s a great company out there called seven tabs, and it’s just a fantastic little app, it’s all mobile friendly. It’s super fast, you can train employees on just about anything you can imagine, they even have a freemium version, but we will have a micro-learning application to help companies with that issue of, Hey, now we have our policy. Now, let’s make sure that everyone is trained on it, so we do have that coming up, we’re pretty excited about that product.

 

0:41:26.3 HENRY LOPEZ: And by macro learning, you mean it’s not to sit down an employee for two hours in front of a screen, it’s a quick video or a quick lesson and those kind of more consumable while I’m working kind of things. Is that correct?

 

0:41:40.3 JOHN MORLAN: Yeah, so it’s almost like a mini-slide presentation that he’s on your phone, there’s no log-in, you just click on it and you sit through and it literally takes less than two minutes, I’m trying to get so many companies to get off of this compliance training where we cram people in a room you have once a year for four hours, they leave and they don’t remember anything. Yeah.

 

0:42:00.7 HENRY LOPEZ: Were people, I’ve seen it, people watch it, turn down the volume and pretend like they’re watching it, but they’re not consuming any of it. None of it is processing. That’s right.

 

0:42:11.0 JOHN MORLAN: And a place we think we can really help small business… Where do we go online to learn more, smarter risk dot com, that’s a site, you can access the application from there, we also have a blog, it’s kind of light right now, we’re the third block place, we’re working on our fourth now, but the blog is really… I really wanted to build something that was short and sweet and to the point, so the blog articles are short and they’re just helpful information for small business owners.

 

0:42:37.0 HENRY LOPEZ: Excellent. Alright. Always looking for a book recommendation. Is there a book could be on this subject or on whatever that you would recommend…

 

0:42:44.7 JOHN MORLAN: Yeah, you know, one of the things that really influenced me in my career, especially when I started working directly with organizations and implementing these programs is change management principles, and one of the best books I’ve read… It’s called ad car, it’s A D-K-A-R, and it’s just a step-by-step process for change management within an organization, and that’s a big problem in safety risk management, but in anything, when dealing with business, your organization gets to a certain point and you try to make changes, and it’s really difficult, and this book just walks you through some great steps to take your company from where you want it to be, or from where it is to where you want it to be a…

 

0:43:19.8 HENRY LOPEZ: K-A-R-A-T. Right, excellent. I have not heard of that book, thanks for that recommendation. We’ll have a link to it on the show notes page at the holiness dot com. Alright, let’s wrap it up, John, what’s the one thing you wanna stick away from this conversation we’ve had about risk management related to ideally and being able to manage and control our insurance costs from a small business owner perspective. What’s one thing you want us to take away?

 

0:43:49.2 JOHN MORLAN: It’s a Isom of, this is all just random events, the insurance cost, really like anything else can be managed, you just need the right tools and you need to put the right framework in place to do that, so if you put the effort in, you’ll get to benefit

 

0:44:05.6 HENRY LOPEZ: It’s also good business. The things that we’re working on here and focusing on here are things that are great for the environment, period, regardless of whether it does or doesn’t save me money on insurance rates. Right. We’re talking about stuff that keeps people from getting hurt on the job or customers getting hurt on my side, so it has all of those obvious benefits as well.

 

0:44:27.1 JOHN MORLAN: Oh, that’s right. And you gotta go a little bit deeper. You wanna make sure that people do go home every day, that it sounds cliche and safety what you do, and by doing this, you can make sure or you can at least say with the clear conscious, Hey, I’ve taken every precaution we can to make sure that happened and that’s really important. And something else I think business owners don’t really think about is whenever you have a claim, there are a lot of times costs, it just aren’t covered by your insurance, you know, let’s say you have three people in the department that runs a machine, one person has an amputation, and I’ve seen this and it’s bad, just from the psychological standpoint, actually, do an employee who had to go to counseling after they lost a finger, they had to go to counseling for about a year. It was very, very tough. But a lot of times, I think we don’t think about these other costs, like for example, now I’m gonna have to pay the two guys who run that machine over time, or I’m gonna have to hire someone else, and there’s all costs that…

 

0:45:21.4 JOHN MORLAN: So there’s all these uninsured calls, and the estimates vary, but it’s anywhere from businesses right now spend one to 10 times as much on uninsured cough as they do insured cost.

 

0:45:33.2 HENRY LOPEZ: So… Wow, so bring… Alright, tell us again where to go online to learn more, smarter dot com. Excellent, John, thanks for being with me today and sharing all of these insights and knowledge and perspectives, especially in this area that I think because it can be scary, we tend to maybe bury your head sometimes as business owners and just hope it never happens to us. I remember my very first business, I had a pizza delivery business, and I always top, boy, I hope nobody runs over anybody, right. And I say that only half-jokingly, of course, it’s a very serious thing, but we have to as business owners, be aware of what those exposures are, and insurance reduction are not put in place to plans, the procedures, the safety programs to mitigate those things. So thanks for being with me and sharing those thoughts and ideas… I appreciate it.

 

0:46:26.8 JOHN MORLAN: Henry, thanks so much, I really enjoyed it.