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Insurance Rates on the Rise Once Again & How Your Business Can Prepare
Dec 28, 2020
Over the years, one thing has remained constant in the world of an insurance agent, the ever- increasing cost. Every year, your business is probably paying more than they did the year before for premiums. Most customers focus on their personal performance and respond to the increase by saying “but I’ve never filed a claim before,” which is the most popular answer received. While that may be true, that doesn’t mean that the business down the street didn’t and insurers do not like losing money. While losses are not the only driving factor in this equation, it is the one this article will focus on and some things you can do to prepare.
Hard Market
Studies are showing an average forecasted rate increase in the double digits in most lines of business with worker’s compensation being one of the few exceptions. Medical malpractice continues to be the loss leader with their rates set to hike as much as 17% in 2021. Litigation factors such as large jury awards and general attitudes of empathy towards the plaintiff are driving payouts to the upper limits.
Directors and Officers renewal offers are estimated to seek double digit rate increases and D&O premiums could easily double for some industries. Again, the rates are driven by large lawsuits being filed against employers- both in terms of the number of cases and the size of the awards. This line is also seeing a rise in class-action securities cases which are driving profits down and rates ever higher.
Commercial Auto has long been a rating loser for companies. Again, there’s a lot more at play than one company or one person’s driving record here. Carrier loss ratios continue to deteriorate due to large auto losses from litigation efforts. Underwriters are under pressure to write a profitable book of business and therefore are more thoroughly underwriting risks, crossing their T’s and dotting their I’s.
Like litigation is to liability, natural catastrophes are a driving factor in the increase of property premiums. Recent uncontrolled wildfires, hurricanes, tornados, and droughts have hit certain areas and have resulted in losses that have decimated company profits triggering insurance carriers to find ways to make up for their losses. More extreme weather patterns make historical loss data insufficient and current rates are not reflective of the unpredictability of the cost of losses so you can expect property premiums to rise with the tides, so to speak.
How Can Your Business Prepare?
There are things that you can do as a business to better prepare for the upcoming years of unknown market pricing. Step one is to talk to you agent. Don’t hide from your insurance agent, ask them questions, hold them accountable, ask how they can help your business to help control risk. They should have ideas on how you can improve safety, reduce risk and ultimately save your bottom line. He or she may have ideas on how you can reduce the costs of insurance by either retaining more of the risk in higher deductibles or by adjusting policy limits.
Insurance is only one tool that a business should be using to protect their most important asset. There are additional policies and practices that can be put into place to help your business prevent litigation losses from happening in the first place. Talk to SimcoHR and find out about how our HR consulting packages can help you be better prepared in the event of a lawsuit, or more preferably how to avoid that lawsuit in the first place by making sure that your business is in full compliance with all laws, advice on how to handle employee issues and the latest news and updates in this ever changing business environment.
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On April 29, 2024, the U.S. Equal Employment Opportunity Commission (EEOC) published its final guidance on harassment in the workplace. The guidance explains how the EEOC may enforce equal employment opportunity (EEO) laws against an employer when workplace harassment is alleged or suspected. Background The EEO laws are a collection of federal laws that prohibit covered employers from discriminating against or harassing individuals based on certain characteristics. These characteristics, also known as protected traits, include race, color, religion, national origin, sex (including sexual orientation, gender identity and pregnancy, childbirth, or related medical conditions), disability, age (40 and older) and genetic information (including family medical history). Between 1987 and 1999, the EEOC issued several documents designed to guide agency staff members who investigate claims of harassment under EEO laws. The agency issued proposed enforcement guidance on these topics on Oct. 2, 2023. This final guidance consolidates and replaces the earlier documents. Final Guidance In its final guidance, the EEOC provides several updated examples to reflect a wide range of modern scenarios and address emerging issues, such as how social media posting and other online content may contribute to a hostile work environment. It also incorporates current case law, including the U.S. Supreme Court’s 2020 decision in Bostock v. Clayton County, that discrimination on the basis of sexual orientation or gender identity constitutes sex discrimination in violation of Title VII of the Civil Rights Act of 1964 (one of the EEO laws). The final guidance focuses on three main considerations to analyze in any workplace harassment claim: Whether the conduct is based on the individual’s legally protected trait; Whether the conduct resulted in a hostile work environment or explicit change to the terms or conditions of employment; and Whether there is any legal basis for holding the employer liable. The guidance explains that an employer may be liable for workplace harassment under several legal standards that often depend on the harasser’s relationship with the employer. The guidance also describes preventive and corrective actions an employer may take to help establish defenses against liability for workplace harassment. Employer Takeaways Although the final guidance is not legally binding, it provides insight into how the EEOC will investigate harassment claims. The EEOC also identifies a number of steps employers can take to prevent harassment, such as: Establishing a clear, easy-to-understand anti-harassment policy; Having a safe and effective procedure that employees can use to report harassment, including having more than one option for reporting; Providing recurring training to all employees (including supervisors and managers) about the company’s anti-harassment policy and complaint process; and Taking steps to ensure the anti-harassment policy is being followed and the complaint process is working. Employers should consider reviewing and familiarizing themselves with the updated guidance. For additional information, employers may review other EEOC resources regarding workplace harassment, including: EEOC Harassment Home Page EEOC Sexual Harassment Home Page Summary of Key Provisions : EEOC Enforcement Guidance on Harassment in the Workplace Questions and Answers for Employees : Harassment at Work
On April 29, 2024, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) published Field Assistance Bulletin (FAB) No. 2024-1 on the use of artificial intelligence (AI) in the workplace. The FAB follows a statement released by the White House announcing key AI-related actions following President Joe Biden’s executive order issued on Oct. 30, 2023, on establishing standards for AI safety and security. Guidance on AI-related Wage and Hour Risks Employers are increasingly using AI tools to generate timecards, set schedules, monitor performance, track employee hours and process payroll. As such, the FAB highlights certain compliance risks under the Fair Labor Standards Act (FLSA) for employers using these tools. These risks include: Tracking employee work time; Monitoring employee break and waiting time; Using location-based monitoring for individuals performing work at multiple geographic locations; Calculating employees’ regular rate of pay and overtime compensation; and Violating the FLSA’s antiretaliation provisions To aid employers in addressing these compliance risks, the WHD identifies recommended practices, including exercising proper human oversight, to help ensure that AI systems and tools do not violate the FLSA. Additional AI-related Guidance In addition to addressing FLSA compliance risks, the FAB also examines certain AI-related risks that may arise under other laws, including the Family and Medical Leave Act (FMLA), the Providing Urgent Protections for Nursing Mothers Act (PUMP Act) and the Employee Polygraph Protection Act (EPPA). For example, using AI tools to administer FMLA leave can create potential risks for violating the law’s certification requirements when determining whether an employee’s leave is FMLA-qualifying. Employer Action Items While FABs are not necessarily legally binding, they offer insight into how the DOL interprets laws it enforces and how agency officers will analyze workplace conditions and circumstances to enforce compliance. Using AI systems for scheduling, timekeeping and calculating rates of pay and overtime may increase an employer’s risk under the FLSA. Therefore, employers should ensure that their AI systems and tools comply with all federal laws and regulations by examining potential legal and business risks associated with AI, implementing AI usage policies and establishing internal best practices.
As we step into May, we're reminded of the importance of mental health and well-being. May marks Mental Health Awareness Month, offering us an opportunity to renew our commitment to nurturing our minds and fostering supportive environments, both in and out of the workplace. In this blog post, we'll explore practical strategies for enhancing mental health, including small tips that can refresh you mentally during the workday. Embracing Self-Care Amid life's hustle and bustle, it's crucial to carve out time for self-care. Whether it's practicing mindfulness, engaging in hobbies, or simply taking a moment to breathe deeply, prioritizing self-care nurtures mental resilience and fosters a sense of inner peace. Cultivating Work-Life Balance In today's fast-paced world, achieving a healthy work-life balance is essential for mental well-being. Set boundaries between work and personal life, establish a routine that includes breaks and leisure activities, and strive to unplug from technology during downtime. Remember, balance is key to sustaining productivity and happiness. Fostering a Supportive Workplace Culture Employers play a pivotal role in promoting mental health in the workplace. Encourage open dialogue about mental health, offer resources such as counseling services or mental health days, and prioritize flexibility to accommodate employees' well-being needs. By fostering a supportive culture, organizations cultivate environments where employees feel valued, understood, and empowered to prioritize their mental health. Supporting Loved Ones If someone you care about is struggling with mental health challenges, your support can make a significant difference. Listen without judgment, offer empathy and reassurance, and encourage them to seek professional help if needed. Remember, your presence and understanding can provide comfort and strength during difficult times. Practicing Gratitude Gratitude is a powerful tool for enhancing mental well-being. Take time each day to reflect on moments of gratitude, whether it's appreciating the beauty of nature, expressing gratitude for supportive relationships, or acknowledging personal achievements. Cultivating a mindset of gratitude fosters resilience and enhances overall happiness. Small Tips to Refresh Your Mind During the Workday Take short breaks: Step away from your desk for a few minutes to stretch, walk around, or simply gaze out the window. These brief pauses can rejuvenate your mind and boost productivity. Practice deep breathing: Incorporate deep breathing exercises into your day to reduce stress and promote relaxation. Close your eyes, inhale deeply through your nose, hold for a few seconds, and exhale slowly through your mouth. Connect with nature: Spend time outdoors during your lunch break or coffee breaks. Even a brief stroll in a nearby park or green space can invigorate your senses and clear your mind. Listen to music: Create a playlist of soothing music or uplifting tunes to listen to during work breaks. Music has the power to uplift your mood, reduce anxiety, and enhance focus. Stay hydrated: Drink plenty of water throughout the day to stay hydrated and maintain mental alertness. Dehydration can impair cognitive function, so keep a water bottle handy and sip regularly. Practice mindfulness: Take a few moments to practice mindfulness or meditation exercises. Focus on your breath, observe your thoughts without judgment, and cultivate a sense of presence and calm. Declutter your workspace: A clutter-free workspace can promote mental clarity and productivity. Take a few minutes to tidy up your desk, organize files, and create a calming environment conducive to focus. Engage in positive self-talk: Replace negative self-talk with affirming and encouraging statements. Remind yourself of your strengths, accomplishments, and capabilities, and cultivate a mindset of self-compassion and resilience. Connect with colleagues: Build supportive relationships with coworkers by engaging in meaningful conversations, sharing experiences, and offering mutual support. A sense of camaraderie and connection can foster a positive work environment and bolster mental well-being. As Mental Health Awareness Month unfolds, let's commit to nurturing our minds and supporting those around us. By embracing self-care, fostering work-life balance, promoting workplace well-being, and offering compassionate support to loved ones, we contribute to a culture of mental health awareness and resilience. Remember, you are not alone. Reach out for support if you need it, and let's journey toward better mental health together.
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On April 29, 2024, the U.S. Equal Employment Opportunity Commission (EEOC) published its final guidance on harassment in the workplace. The guidance explains how the EEOC may enforce equal employment opportunity (EEO) laws against an employer when workplace harassment is alleged or suspected. Background The EEO laws are a collection of federal laws that prohibit covered employers from discriminating against or harassing individuals based on certain characteristics. These characteristics, also known as protected traits, include race, color, religion, national origin, sex (including sexual orientation, gender identity and pregnancy, childbirth, or related medical conditions), disability, age (40 and older) and genetic information (including family medical history). Between 1987 and 1999, the EEOC issued several documents designed to guide agency staff members who investigate claims of harassment under EEO laws. The agency issued proposed enforcement guidance on these topics on Oct. 2, 2023. This final guidance consolidates and replaces the earlier documents. Final Guidance In its final guidance, the EEOC provides several updated examples to reflect a wide range of modern scenarios and address emerging issues, such as how social media posting and other online content may contribute to a hostile work environment. It also incorporates current case law, including the U.S. Supreme Court’s 2020 decision in Bostock v. Clayton County, that discrimination on the basis of sexual orientation or gender identity constitutes sex discrimination in violation of Title VII of the Civil Rights Act of 1964 (one of the EEO laws). The final guidance focuses on three main considerations to analyze in any workplace harassment claim: Whether the conduct is based on the individual’s legally protected trait; Whether the conduct resulted in a hostile work environment or explicit change to the terms or conditions of employment; and Whether there is any legal basis for holding the employer liable. The guidance explains that an employer may be liable for workplace harassment under several legal standards that often depend on the harasser’s relationship with the employer. The guidance also describes preventive and corrective actions an employer may take to help establish defenses against liability for workplace harassment. Employer Takeaways Although the final guidance is not legally binding, it provides insight into how the EEOC will investigate harassment claims. The EEOC also identifies a number of steps employers can take to prevent harassment, such as: Establishing a clear, easy-to-understand anti-harassment policy; Having a safe and effective procedure that employees can use to report harassment, including having more than one option for reporting; Providing recurring training to all employees (including supervisors and managers) about the company’s anti-harassment policy and complaint process; and Taking steps to ensure the anti-harassment policy is being followed and the complaint process is working. Employers should consider reviewing and familiarizing themselves with the updated guidance. For additional information, employers may review other EEOC resources regarding workplace harassment, including: EEOC Harassment Home Page EEOC Sexual Harassment Home Page Summary of Key Provisions : EEOC Enforcement Guidance on Harassment in the Workplace Questions and Answers for Employees : Harassment at Work
On April 29, 2024, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) published Field Assistance Bulletin (FAB) No. 2024-1 on the use of artificial intelligence (AI) in the workplace. The FAB follows a statement released by the White House announcing key AI-related actions following President Joe Biden’s executive order issued on Oct. 30, 2023, on establishing standards for AI safety and security. Guidance on AI-related Wage and Hour Risks Employers are increasingly using AI tools to generate timecards, set schedules, monitor performance, track employee hours and process payroll. As such, the FAB highlights certain compliance risks under the Fair Labor Standards Act (FLSA) for employers using these tools. These risks include: Tracking employee work time; Monitoring employee break and waiting time; Using location-based monitoring for individuals performing work at multiple geographic locations; Calculating employees’ regular rate of pay and overtime compensation; and Violating the FLSA’s antiretaliation provisions To aid employers in addressing these compliance risks, the WHD identifies recommended practices, including exercising proper human oversight, to help ensure that AI systems and tools do not violate the FLSA. Additional AI-related Guidance In addition to addressing FLSA compliance risks, the FAB also examines certain AI-related risks that may arise under other laws, including the Family and Medical Leave Act (FMLA), the Providing Urgent Protections for Nursing Mothers Act (PUMP Act) and the Employee Polygraph Protection Act (EPPA). For example, using AI tools to administer FMLA leave can create potential risks for violating the law’s certification requirements when determining whether an employee’s leave is FMLA-qualifying. Employer Action Items While FABs are not necessarily legally binding, they offer insight into how the DOL interprets laws it enforces and how agency officers will analyze workplace conditions and circumstances to enforce compliance. Using AI systems for scheduling, timekeeping and calculating rates of pay and overtime may increase an employer’s risk under the FLSA. Therefore, employers should ensure that their AI systems and tools comply with all federal laws and regulations by examining potential legal and business risks associated with AI, implementing AI usage policies and establishing internal best practices.
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