InsurTech Oyster Launches Workers’ Comp Service In California

A new insurance technology (InsurTech) company is rolling out its workers’ compensation solution in California.

Insurance Journal reported late last week that Oyster Insurance launched its services in California after rolling out in New York and New Jersey earlier this year. The company partners with payroll service providers to distribute workers’ compensation, targeting small businesses (SMBs) and startups.

“Very often, these are businesses [that] are starting up for the first time, hiring their first employees, and it’s their first time setting up a payroll system,” said Oyster’s Managing Director Curt Stevenson in an interview with the publication.

Oyster offers a pay-as-you-go model for its SMB clients, allowing businesses to add employees as they grow each pay period, and pay via electronic funds transfer (EFT) already in use from when they enrolled with their payroll provider. The firm’s application program interface (API) enables business owners to receive a quote for its services nearly instantly, with Oyster able to automate the risk assessment process by using data from the payroll company  including financial and demographics information, and class codes.

However, one expert warned that workers’ compensation policies need to consider more than just payroll data. Christopher Boggs, executive director of Independent Insurance Agents and Brokers of America, told the publication that workers’ comp “is more complicated than just applying payrolls to rates.”

“Because it is statutorily heavy and subject to a lot of legal interpretations, there are a lot of cracks and crevices where an agent is needed to advise the client,” he said, warning that small businesses in need of such a solution often need more information and guidance than might be provided through an automated online portal. “Workers’ comp should certainly never be purchased without the benefit of a knowledgeable agent,” he added.