Missouri businesses are experiencing declining rates for Workers Comp

In 2020, Missouri Workers Comp Rates will be declining for the 6th consecutive year

Earlier in December of 2019, the Missouri Department of Commerce and Insurance recommended a 1.6 percent decrease for workers compensation loss costs next year. If approved, this decrease marks the sixth consecutive year of declines for Missouri Workers Comp Rates in 2020.

Gateway Arch, Kiener Plaza, Saint Louis, Missouri

The reason for the decrease in premium for 2020 is because of declining lost-time claim frequencies and increasing average medical claim costs. In a statement from Chlora Lindley-Myers, Director of the Department of Commerce and Insurance, “Missouri’s lost-time claim frequency continues to decrease due to safety improvements in the workplace, but average medical claim costs have increased every year since 2014,”

Saint Louis Cardinals, Major League Baseball, Baseball, Busch Stadium

When Missouri Workers Comp Rates decline it is a boom to the economy throughout the state. Not all businesses nor all industries will experience positive rate declines. Depending upon the businesses experience modification rating, the classification code of the business, and the annual revenue of the business; some businesses may experience more or less of a decline in workers comp premium. The NCCI’s proposed average changes in loss costs by industry group are:

  • Manufacturing: -0.7%
  • Contracting: -1.7%
  • Office and Clerical: -1.6%
  • Goods and Services: -1.9%
  • Miscellaneous: -1.8%

Kansas City, Union Station, Skyline

Moderate Decline in store for Washington in 2020

Washington Workers Compensation Rates will be declining by a modest 0.8%

As of the first of January 2020, Workers Compensation Rates for the business community in the state of Washington will be staying relatively stable. The Washington Department of Labor & Industries (L&I) announced a moderate decline of 0.8% in 2020. While the decline this year is modest, it is the third consecutive year of declining Washington Workers Comp Rates 2020. The previous two years included a 5 percent cut in 2019 and a 2.5 percent cut in 2018. Before these declines, rates for Workers Compensation in Washington were the 16th most expensive rates in the country.

Seattle, Washington, Panorama, City

According to L&I Director Joel Sacks, “Our workers’ compensation system is in good shape. Every year we help tens of thousands of people recover from on-the-job injuries and go back to work. Our programs to help injured workers are making a real difference, and workplace injury rates in Washington are declining. That’s great for workers and their families and is helping us keep costs down.” Because of the high cost to purchase workers compensation coverage, any movement in a positive direction is welcomed by the small business community.

Seattle, Mount Rainier, Washington State

The Workers Compensation System in the stte of Washington is unique. First and foremost, it is unique because it is what is referred to within the insurance industry as a monopolistic state. North Dakota, Ohio, and Wyoming are also monopolistic states. The term monopolistic comes from the fact the state requires employers to purchase coverage from a government-operated insurance fund. This is especially important for businesses that operate across state lines. Workers compensation is governed by the state governments, not at the federal level. Most states have reciprocity rules in place to deal with issues involving multiple states. Monopolistic states require any business operating in any capacity to purchase some form of coverage within the state. Usually a stop-gap insurance product can meet the reqirements for coverage needs that aren’t covered by the funds in each state they operate in.

New Jersey Workers Compensation 2020

The Workers Comp System in New Jersey will experience changes in 2020

Previously in 2019, the State Senate in New Jersey approved a series of adjustments to the supplemental benefits for some types of injured workers. These are workers receiving compaensation within the workers compensation system. As a result of these changes, insurance carriers anticipate increased costs to cover injured workers throughout the state. Because of these changes, New Jersey Workers Comp Rates in 2020 may be the same or more compared to previous years.

New York, New Jersey, City, Urban, America, Water

In September of 2019, The New Jersey Department of Banking and Insurance requested a 3.8% decrease in overall premium effective January 1, 2020. At the moment, this is just a recommendation. If approved, this work mark the 4th consecutive year of declining rates within the state of New Jersey. The recommended decarease is based upon several years of declining claims throughout the state and an annual review of classification relativity. This is good news, because since 1997 the amount paid out for Temporary Disability and Total Disability has nearly doubled ($496 max /$132 min in ’97 and $945 max/$252 min in 2020). Experiencing a few ears of better claims frequency is certainly good news compared to these increases over the past two decades.

Atlantic City, New Jersey, America

This is good news, but business owners should plan for an increase in the years ahead.  Increases or moderate declines may be coming because at the current time, the amount paid out for Total Permanent Disability (70% of wages) is now at a maximum rate of $945.00 and a minimum rate of $35.00 per week. The amount paid for Temporary Disability (70% of wages) is now set at a maximum rate of $945.00 per week and a minimum rate of $252.00 per week. The maximum duration a person can be on temporary disability is currently at 400 weeks. Death benefits are again at 70% of wages with a maximum rate of $945.00 and a 450 weeks plus the spouse’s statutory benefits. An allowance for funeral is now capped at $3,500.00.

 

Oregon Workers Comp Rates are Declining in 2020

Next year, Oregon Businesses will Experience the 7th Consecutive Year of Decreasing Rates

Beginning the Oregon businesses will be enjoying an average rate cut of 8.4 percent. This is in addition to a decline of 9.7 percent for Oregon Workers Compensation Rates in 2019. The decline over the past 7 years has added to an overal decline of 45 percent from 2013 to 2020. With these new rates, businesses will pay $1.02 per $100 of payroll. This amount is down from $1.11 in 2019.

Nature, Landscape, Outdoor, Mountain, Travel

2020 Workers Compensation Rates in Oregon are some of the lowest in the country. According to a 2018 study by the Oregon Department of Consumer and Business Services (DCBS), the average amount businesses in Oregon pay for Workers Compensation Premium is ranked 46 out of 50 states. Cameron Smith, the Director of The DCBS said, “The steady decline in workers’ compensation costs is about more than just the numbers. It demonstrates the hard work of employers, workers, insurers, and government to maintain essential worker protection programs and robust benefits for injured workers while keeping business costs low.”

Cannon Beach, Pacific Ocean, Ecola

The content here at My Insurance Question is created by the experts at The Insurance Shop LLC. The Insurance Shop is an independent insurance agency founded in 2005. Over the years, The Insurance Shop has developed many relationships with more then a dozen insurance carriers. These relationships allow the agents within The Insurance Shop to shop around for the ultimate value on the market. If you are looking for the best value for an honest and hardworking agent, give the agents at The Insurance Shop LLC a chance to earn your business.  Give us a call at 800-800-4864.

Florida Workers Compensation Rates Are Declining in 2020

Workers Comp Premium In Florida will be cheaper in 2020

In 2020, Workers Compensation Rates are going to be 7.5 percent less compared to Florida Workers Comp Rates 2019. This represents the third consecutive year of declining workers compensation insurance premium. This is a larger decrease compared to the recommended decrease of the National Council on Compensation Insurance (NCCI). According to officials with NCCI, the decrease is due to improving technology, safer workplaces, better risk management, and a long-term shift from manufacturing to service sectors.

Mickey Mouse, Disney, Epcot, Sculpture

Florida Workers Compensation Rates Volatility

Volatility has been constant in the workers compensaiton market for the past five years. Fortunately, Florida Workers Comp Rates in 2020 are moving in a positive direction.  The uneasiness within the workers comp market really began in 2016. 2016 is when the Florida Supreme Court made two rulings that impacted the workers compensation system. Those two court cases were  Castellanos vs. Next Door Company and Westphal v. City of St. Petersburg. Additionally, the state legislature in Florida also passed Senate Bill 1402.

Panorama, Miami, Florida, Water, Usa

Castellanos vs. Next Door Company

Castellanos vs. Next Door Company was a court case that overruled a previous 2009 decision. The 2009 decision limited the amount a judge could award for attorneys fees in workers compensation lawsuits. Because of these limitations, most of the amount awarded went to legal fees. After the Castellanos vs. Next Door Company Ruling, judges merely had to use the previous fee schedule as a recommendation, but depending on the situations surrounding each case they could award more or less for attorney’s fees.  This court case accounted for 10.1 percent of the average statewide increase.

Westphal v. City of St. Petersburg

Westphal vs. City of St. Petersburg was a court case that dealt with the 104-week statutory limitation on temporary total disability benefits. This ruling made the statutory time period unconstitutional. The ruling extended this time period to 260 weeks. Because of the additional 156 weeks, insurance carriers expect to pay out significantly more for these types of claims. This court case accounted for 2.2 percent of the entire increase in 2017.

Senate Bill 1402

The final issue that caused workers comp rates to rise in 2017 was Senate Bill 1402. This was related to updates within the Florida Workers’ Compensation HCPR Manual. This bill accounted for the final 1.8 percent increase on premium for workers’ compensation in 2017.

 

Key Points when Considering Garage Keepers Insurance

What is Garage Keepers Insurance?

To make an informed decision about purchasing insurance for a car dealership, garage, or auto repair shop; first you need to know exactly what Garage Keepers Insurance is. Garage Keepers Insurance is designed to protect a garage business for loss to a customer’s auto when it is left in the care and supervision of the business. Think of this as protection for auto repair shops, garages, and car dealerships looking to block more risk when it comes to attending, servicing, repairing or storing autos in their garages or on their premises. Here are three aspects to consider when determining whether to buy this coverage and if so, what limits you need.

Car, Mechanic, Automobile, Service, Repair, Auto

The Differences Between Garage Keepers and Garage Liability?

A Garage Liability Insurance is a specific type of insurance policy. A Garage Keepers Policy protects clients against damage to a customer’s vehicle including fire, theft, extreme weather, and vandalism. This policy, however, does not cover damage that occurs from things like faulty workmanship, parts or out-of-date warranties. The policy covers garage and auto body shops for both bodily injury and property damage. This type of a liability insurance policy is designed to protect incidents that involve ownership, maintenance, or use of locations for garage business operations.  Some carriers offer the ability to extend liability for cardealerships to cover all autos on a car lot. This would include both cars to be sold and cars having maintenance performed.

Don’t forget to ask about Limits, Deductibles and a few other details

During the buying process, every business owner must decide what type of deductible and the limit they are comfortable with. This decision will determine what the business pays for annual premium and how much the insurance carrier will pay out in the event of a claim. Two things to be aware of when deciding on this coverage is if the policy is Comprehensive or if the policy has Specified Causes of Loss. Comprehensive coverage covers the damage to a customers auto from any cause. Often there are a few exceptions that commonly include  the auto’s collision with another object or the auto’s overturn. A garage keepers liability policy that is the specified causes of loss are cheaper compared to comprehensive policies, but they do not cover damages cause dby fire, lightning, or explosion; theft; or mischief or vandalism.

Coverage for these policies can be sold with two deductibles. One applies to each vehicle and the other applies to each event. Having an extended conversation with your insurance agent is a great way to determine if you need this policy and if so where your limit should be. The size of a businesses facility, the revenue of your business, and how many vehicles the business commonly has in possession will all determine the amount of liability needed by any particular business.

Car, Mechanic, Automobile, Mechanical

What Types of Liability are Covered?

There are three main types of liability covered by a Garage Keepers Policy. Those three types of liability are

  • Legal Liability
  • Direct Primary
  • Direct Excess

Legal Liability

Legal Liability is the most common form of liability that cuases a business to file a claim on a Garage Keepers Liability Policy. This typoe of claim deals with damage to a clients claim because of negligence by the insured. An example of this is when a mechanic is involved in an accident while test driving a vehicle.

Direct Primary

DIrect Primary Liability covers the customers vehicle regardless of liability. When a loss occurs that is not the fault of the insured (the business), this type of liability kicks in to cover the loss. Weather related damage and theft are the two most frequent reasons for this type of claim.

Direct Excess

Direct Excess is very similar to direct primary, but only pays in excess of any other collectible insurance. This type of policy is much cheaper to secure, but does come with the business taking on an additional portion of the losses when a large claim occurs.

Motor, Metal, Vehicle, Machine, Part

Exclusions to Consider

Before pulling the trigger on any insurance policy, a business owner needs to have a full undertanding of the exclusions involved with any policy they are purchasing. Common included exclusions for a Garage Keepers Insurance Policy include: theft by an employee, defective parts, faulty work, mobile radios, scanners, radar detectors, CD players, speakers or any equipment not permanently installed in the vehicle.

 

What is OSHA and how does it impact Workers Compensation?

OSHA stands for the Occupational Safety and Health Administration. This government organization is part of the United States Department of Labor. It is the department within the government in charge of the safety and health of workers in the workplace. If you have employees in your business, you need to know about regulations. Any business with one or more employees must comply with OSHA regulations. Here is some information about the history and the three main aspects of the organization.

Image result for OSHA

OSHA was created in 1970 as part of the OSHA Act. This act created to ensure safe and healthful working conditions, as well as to to preserve human capital throughout the workforce of the United States. One primary aspect the training and education of OSHA focuses on is accident prevention. Prior to this act, there were no laws in place to specifically address safety and health in the workplace. Congress created this act in response to workplace accidents amounting to 14,000 worker deaths annually. Since its inception, OSHA has cut the work-fatality rate by more than half. There are three tactics the organization uses to improve workplace safety throughout the United States:  Education, Training and Enforcement.

Hse, Osha, Health, Safety, Cleaning

Education

One aspect of OSHA that far too many businesses do not realize is their focus on Education and Training. The OSHA Training Institute (OTI) Education Center Program was created in 1992 as a response to a growing number of requests for training from private sector personnel and Federal personnel from other agencies increased throughout the 1980’s. The two most popular courses currently include the #500 Trainer Course in Occupational Safety and Health Standards for the Construction Industry and #501 Trainer Course in Occupational Safety and Health Standards for General Industry. Additional courses include topics such as Hazardous Materials, Machine Guarding, Ergonomics, Confined Space, Excavation, Electrical Standards and Fall Arrest Systems.

Training

OSHA is most known for enforcement and instituting fines, but arguably the most important part of OSHA is Employee Training. As part of its duty to keep the workforce safe and productive, OSHA requires all businesses to create an emergency action plan and take steps to set up a training program to train all employees in all aspects of the OSHA plan. What must be included in this plan is how to deal with hazardous substances, blood-borne pathogens, emergency situations, and what to do if an inspector comes to your workplace.

Enforcement

In addition to education and training, OSHA is tasked with enforcement. This is what the organization is most known for. Officials can issue fines ranging into the tens of thousands of dollars for violations, and they can refer violators for criminal prosecution if they deem such action is warranted. Any business with employees must comply with regulations. If your small business had 10 or fewer employees during the last year, you don’t have to file an injury or illness reports, but you still must comply with all other regulations. It is the responsibility of the business owner to ensure their business and all employees are trained to be in compliance with OSHA Regulations.

Image result for OSHA

California Workers Comp Rates 2020 are Declining 5.7%

Marking 5 Consecutive Years of Continuing Declines

California Workers Comp Rates 2020 are going to cost the business community less. This is because in August of 2019, the Workers’ Compensation Insurance Rating Bureau (WCIRB) voted to lower Workers Comp Pure Premium Rates by an average of 5.7% below the rates of 2019. In 2019 Rates were down 23.5 percent compared to what businesses paid in 2018.  This year marks the fifth year of declines and the ninth consecutive biannual decrease dating all the way back to 2015. These decreases mark a total decline of approximately 44 percent.

Golden Gate Bridge, Usa, America, Bridge

What is contributing to Declining California Workers Compensation Rates in 2020?

As of  Jan. 1, 2020 advisory pure premium rates are $1.58 per $100 of payroll. This represents a significant decline of 5.7% compared to California Workers Comp Rates 2019. These declines are continuing because of continued downward loss development, claim settlements accelerating, declining pharmaceutical costs, as well as a decline in the number of filed liens. When this many factors are improving, insurance carriers are able to pass some of those savings on to the businesses purchasing coverage.

California Forest, Nature, Tree, Landscape, Redwood

What is limiting the declines from being larger?

California still suffers from the most expensive workers comp rates in the entire country. There are numerous reasons rates remain high despite multiple years of declining premium. In the filing, the WCIRB also noted that factors such as increases in cumulative trauma claims, rising claim severities and continued high levels of allocated loss adjustment expenses are moderating the pure premium rate declines and warrant continued monitoring.

Point Arena Lighthouse, Light, Pacific Ocean, California

Information about Inclusions and Exclusions for California Workers Comp

In the state of California, all employers are required to purchase workers comp regardless of the number of employees. Sole Proprietors are not automatically included for coverage and are not required to carry coverage on themselves. SOle Proprietors are allowed to be included if they so choose by using the Acord 130 application. Partners are automatically included for coverage and are not allowed to be exempt. Corporate Officers, who are the sole shareholder, are excluded from coverage. LLC Members who work within the business are included for coverage unless the elect to be covered using the Acord 130 form.

Payroll Requirements for California Business Owners in 2020

The Payroll Requirements for Sole Proprietors who decide to include themselves for coverage is a minimum payroll amount of $52,000 and a maximum of $133,900 for rating purposes (As of 01/01/2019). Partners, Officers and LLC Members who are included for coverage must utilize a minimum payroll of $52,000 and a maximum of $133,900 for the purpose of rating workers comp premium (As of 01/01/2018).

 

Joisted Masonry (5022)

Joisted Masonry is a part of NCCI Class Code 5022. Joisted Masonry is also one of six building construction categories established by Insurance Services Office, Inc. (ISO). These six categories are part of the Commercial Lines Manual (CLM) and is designed for the purpose of developing rates for insuring commercial property bas upon the likelihood of damage by fire. The CLM description of Joisted Masonry (5022) Construction is considered a building with exterior walls of masonry or fire-resistive construction equipment rated for not less than one hour and with combustible floors and roofs.

 

Image result for Joisted Masonry

This classification includes worked done on exterior walls with combustible floor and roof. The types of materials used in these walls include adobe, brick, concrete, gypsum block, hollow concrete block, stone, tile, or other similar materials. The code associated with Joisted Masonry (5022) Construction ranks a facility 1-6 based upon how fire resistant the facility is that the business is located or is working on.

Joisted Masonry, Exterior walls, floors, and roof of masonry or fire-resistive materials.

ISO Class 1 is Called Frame. 

Exterior walls of wood, brick veneer, stone veneer, wood ironclad, or stucco on wood. (Construction Code 1)

ISO Class 2 is Called Joisted Masonry (5022).

Exterior walls of masonry material (adobe, brick, concrete, gypsum block, hollow concrete block, stone, tile, or similar materials) with combustible floor and roof.

ISO Class 3 is Called Non Combustible

Exterior walls, floor, and supports made of metal, asbestos, gypsum, or other noncombustible materials.

ISO Class 4 is Called Masonry Non Combustible. 

Same as joisted masonry except that the floors and roof are of metal or other noncombustible materials.

ISO Class 5 is Called Modified or Semi Fire Resistive.

Exterior walls, floors, and roof of masonry or fire-resistive material with a fire resistance rating of at least 1 hour but less than 2 hours.

ISO Class 6 is Called Fire Resistive. 

Exterior walls, floors, and roof of masonry or fire-resistive materials with a fire resistance rating of at least 2 hours.*

How a Business Benefits from a Modified Hammer Clause

Full and Modified Hammer Clauses help take emotion out of the decision to settle a lawsuit. 

In many industries, the reputation of a person or business is paramount. When a business faces a lawsuit, some business owners value their reputation more then they value the cost to settling a lawsuit. Insurance carriers have decades of historical data that allow them to fairly accurately predict how much a lawsuit will cost to fight. In most cases, it is more cost effective to settle for a certain amount as opposed to fighting a claim in the court of law. When a business owner decides to fight a lawsuit, a Hammer Clause is in place to force the business to take on some or all of the costs associated with fighting the lawsuit. The Hammer Clause deals with the additional costs on top of the settlement offered. These clauses are offered in two ways: Full and Modified. A Modified Hammer Clause is the most common form of Hammer Clause because it gives the business owners options, but requires the business to take on some of the risk.

Hammer, Nails, Wood, Board, Tool, Work, Construction

A Full Hammer Clause is put in place to force a business to settle for the recommended amount or take on the full costs in addition to the recommended settlement. When a Modified Hammer Clause is in place the insurance carrier agrees to split the amount of the additional costs with the insured. This is the amount in addition to the recommended settlement plus defense costs. Modified Hammer Clauses are most often offerred in one of two ways. Those two ways are coinsurance percentages of 50/50 and 70/30. This represents the amount the insurance carrier is willing to pay to fight a laawsuit instead of settling. If the Modified Hammer Clause is 70/30 the insurer pays 70 percent of the additional costs, but the business is responsible for 30 percent of the additional costs. The total amount an insurance carrier will pay is limited to the limits of the policy. It will not cover the entire amount of the lawsuit. This is a major reason why Hammer Clauses are in place. To force or encourage a business owner to settle for a well-calculated amount and take emotion out of the decision.