Successful businesses pride themselves on being nimble, able to accommodate slight shifts in strategy or compliance. Sometimes, though, the rules get shuffled and reset in ways that can truly test an organization’s ability to withstand the stress. Such a time appears to be upon us right now.

The Pennsylvania Compensation Rating Bureau (PCRB) has instituted major changes to its workers compensation “experience modifier” calculation, which take effect today, April 1, 2024. No joke.

These changes, the first since 2004, carry significant impact to the more-than 60,000 businesses with experience mods across the state. Under the new system, businesses with the strongest performance in avoiding employee injuries will benefit the most, while poorer performers will see higher modifiers. Either way, the PCRB changes will certainly increase the financial impact – positively or negatively – of employee injuries on workers compensation modifiers.

Experience modifiers use historical employee injury data to forecast future risks and adjust workers’ compensation premiums accordingly. Prior to the change now taking effect, the modifier calculation included all employee injury costs up to $42,500, with annual modifier fluctuations capped at 25%. However, the PCRB’s new plan aims to reflect each business’s loss ratio more accurately by more directly recognizing the balance between injury costs and paid premiums. Key changes include:

• By lowering the premium threshold for modifier eligibility from $10,000 to $5,000, approximately 21,000 additional businesses will become eligible for experience rating.
• The injury cap will now be based on an employer’s size, ranging from $10,000 to $300,000, replacing the flat $42,500 injury cap. This ensures a modifier that better corresponds to an employer’s actual injury history.
• Effective April 1, 2026, the PCRB will revise swing limits by eliminating the cap on decreases while setting a new 40% cap on increases, as well as a maximum modification formula for each business. This means a business’s modifier can only rise by 40% or up to its calculated maximum, whichever is lower.

Contact the professionals at Evergreen Insurance to understand how these new workers’ compensation guidelines can impact your business. We consider all the angles when advising our customers, and that is never more important than when the rules change.

Copyright 2024 Evergreen Insurance, LLC.

Evergreen Insurance, LLC. provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

It’s hardly a secret that data breaches occur and carry significant costs to correct.  But just how often they happen, and the true financial damages they inflict, still can be stunning.

According to statistics collected by security.com, here is just a sampling of data breach fallout ramifications, compiled for 2020, the most recent year statistics are available:

• On average, data breaches globally cost companies $3.86 million each.

• The U.S. represents the most expensive nation for data breaches, with the average cost of each instance totaling $8.64 million.

• Breaches also decrease productivity and disrupt workflow, with companies requiring 280 days – more than nine months – on average to identify and resolve data breaches.

• In 2020, a total of nearly 4,000 data breaches were publicly reported, which at first glance appears to be a 40% improvement from the prior year – but delays in reporting and declining media coverage mean that fewer breaches were reported.  The true total of breaches therefore remains unknown, and could be as high or higher than the year before.

• Data breaches in 2020 reached an all-time high number of exposed records of more than 37 billion.

• Fully 72% of data breaches affected large companies, with the remaining 28% impacting small businesses, proving that no one is completely safe from this phenomenon.

The professionals at The Reschini Group can help create an approach to cybersecurity coverage and data breach prevention that makes sense for your specific business or enterprise.  Contact them to learn more.

Copyright 2024 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

It only makes sense that the people closest to any given situation have the best ability to control it, protect it, or maintain it.  By that same logic, those same frontline people have the most riding on the ongoing safety of any variables impacting that situation.

Managing risk effectively, in other words, stands the best chance when those closest to the potential for risk take responsibility for it.  In the business world, this concept goes by the term contractual risk transfer.

This represents a legally binding way to transfer risk to the party that may be in the best position to control the risks related to the service to be provided.  It involves the use of contractual obligations, such as indemnity and exculpatory agreements, waivers of recovery rights, and “hold harmless” insurance requirements that pass along to others what would otherwise be one’s own risks of loss.

Most often, it means transferring the risk of injury or property damage caused by a company you hired – a subcontractor, vendor, or supplier, for instance – through a contract or insurance policy.  Say, for example, a commercial property tenant assumes the risk for keeping sidewalks clear, or an apartment complex transfers the risk of theft to a security company, or a subcontractor assumes the risk for work performed for a contractor on a property.

Contractual risk transfer actually benefits all parties involved.  The primary party can take comfort that the secondary party – the subcontractor or vendor – will carry out its responsibilities, since it has accepted responsibility for the risk.  Entering into these risk transfer agreements can also lower the cost of insurance for the primary party.

At the same time, the secondary party can benefit from agreeing to contractual risk transfers because it opens the door to increased business relationships and revenues – while also helping to ensure that its employees are well trained, diligent, and responsible.

The professionals at The Reschini Group can help you determine the viability, advantages, and details of entering into contractual risk transfer agreements, to put the responsibility of risk where it makes the most sense.  Contact them to learn more.

Copyright 2024 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

The start of a new year is a good time to analyze where your business is and how you can refresh it. Here’s a checklist that will help you do just that. What are some changes you can make that will help you and your business start off right in 2024?