How Much Homeowners Insurance Do You Need?

| January 23, 2024
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Probably more than you have.

A home purchase comes with excitement and stress until the long-awaited moment arrives: the closing. With the keys to your new home in hand, you pass the threshold into your future filled with friends, family and memorable moments. You’ve surmounted all the hurdles.

Whether you had this experience years ago or just last week, your homeowners insurance probably isn’t top of mind after dozens of signatures and negotiations.

If you’ve been in your home for a few years without a coverage review, there’s a good chance you’re underinsured. Even if you bought recently, you might have grabbed a homeowners policy without much thought just for the sake of closing. Now that you’re in your home and things are settling down, it’s an excellent time to ensure you have the coverage you need for the long haul. 

Interpreting your policy

It’s hard to review a policy that tops 20 pages. Much of it reads like legalese, but it’s still important to understand. Here are a few areas to focus on when considering your homeowners coverage and limits.

Start with your declarations page

Your declarations page summarizes your homeowners coverage, and it appears on the first few pages before the contract language. The declarations (or “dec”) page lists your coverage types and limits (the maximum amount the insurance company will pay you in the event of a covered loss), such as:

  • Dwelling (coverage A), which protects the structure, like your roof, flooring and other materials
  • Other structures (coverage B), which protects things not attached to your home, like a fence or shed
  • Personal property (coverage C), which protects your personal property and moveable things in your home, such as appliances, clothing, jewelry and electronics 
  • Loss of use (coverage D), which reimburses your expenses if you need to live elsewhere after a covered peril
  • Personal liability (coverage E), which helps with property damage and bodily injury claims made by other people that you’re legally obligated to pay
  • Medical payments (coverage F), which helps with medical expenses if someone else sustains a bodily injury while on your property

You might have more (or less) coverage than appears on your declarations page, so review your policy with your agent.

The lender’s interests and your interests: a tale of two liabilities

From your perspective, homeowners insurance should protect you and your belongings and help you rebuild after a catastrophe. A mortgage lender’s perspective is slightly different. They’re interested in protecting their original investment, which is the outstanding loan on your home. Unless you’re mortgage-free, your home is insured as your lender requires. But there’s a good chance that the level of protection you chose when you bought your house isn’t adequate for your risk today.

Your home insurance should cater to both interests:

  • Coverage to rebuild the structure, so you resume payments to the lender or the lender receives total compensation for the loan and retains ownership
  • Coverage to replace your belongings, reimburse you for housing during construction, and get your home back to the way it was before the event

Homeowners insurance offers protection beyond your home: It also covers your personal liability. That alone might be worth a call to your agent.

Replacement value or market value?

You might think it’s enough to insure your home for market value (the cost people are willing to pay for your home). However, its replacement value (the cost to rebuild from the ground up) may exceed its market value. Your home’s market value today could be quite different next year. And the price of materials to rebuild your house is likely to increase year over year.

While some homeowners policies include an inflation guard, not all do. And you could be stuck with the difference.

The purpose of insurance is to make you whole again or put you back in the same type of house you had before the loss. 

You can get an idea of your liability by creating a home inventory. Make a note of the contents and the materials used to build your house. Consider upgrades, collectibles, construction materials, electronics, clothing, furniture and appliances.

Policy limits and catastrophic coverage: an example

Let’s say you have a $200,000 limit on your dwelling and a $100,000 limit for personal property. Your house catches fire and the blaze spreads to your custom detached garage. Everything is destroyed: The insurance company writes it off as a total loss.

Will $200,000 be enough to rebuild (using today’s prices for materials)?

Consider the total cost to rebuild your home, including the roof, siding, lumber, nails, gutters, flashing, insulation, windows, deck, etc. Then consider the internal workings of your house like the walls, crown molding, flooring, carpet, floorboards, paint, built-ins, heating and cooling system, boiler, generator, water heater, whole-house dehumidifier and water filtration system.

Now ask yourself again: Will $200,000 cover the cost to restore what you had, using today’s pricing for materials?

When you reach your insurance policy limits, the money stops. You may have to forgo the custom reclaimed wood flooring or solar panels you had before the fire just to get a roof over your head. Either that or you’re paying out of pocket. And who wants to pay twice?

Other structures are subject to limits equaling 10% of your home’s total coverage. Will $25,000 cover the cost of your fully insulated two-car garage with a wood shop? You might be disappointed if you end up with a drafty single-car garage instead.

Top off your total structural loss with a list of items needed to replace everything in your home. Will $100,000 be enough to replace everything you own?

Consider rugs, drapes, furniture, clothing, electronics, jewelry, collectibles, artwork and appliances. A high-end kitchen could quickly deplete 30% of a $100,000 limit all by itself.

  • Replacement value reimburses the cost to replace without depreciation.
  • Actual cash value reimburses the cost to replace, minus depreciation.
Other ways to cover your homeowners risk liability gaps

Now that you’ve done your homeowners inventory, ask your agent how to close the liability gap and insure against loss. Here are some options to consider:

  • Additional living expenses coverage helps if you’re forced to live somewhere else while your home is being rebuilt or rehabbed. Consider the cost of living in your area, especially if you have school-aged children or other reasons to stay in your neighborhood.
  • Building ordinance or law protects you if a (covered) peril damages a part of your home and the city forces you to upgrade the entire house to code.
  • Riders or floaters cover specialty items like jewelry, computers and silverware (generally up to $2,500).
  • Collectibles insurance (a scheduled property endorsement) covers high-ticket items like artwork, designer handbag stashes, antiques and other collectibles.
  • Other structures covers anything not attached to your house. Think about increasing this coverage if you’ve got stylish outbuildings or elaborate fencing.
  • Personal liability usually covers up to $100,000, but you might want to go higher to protect yourself from footing the bill for a lengthy lawsuit.
  • Extended replacement cost is another way to handle inflation. You can increase your home’s replacement value up to 50% over the guaranteed replacement cost to rebuild; this is especially useful if you’re faced with price gouging after a natural disaster.
  • Sewer backup covers you in case a sewer line or sump pump backs up.
  • Flood coverage is a separate line of insurance you can buy. Floods can happen anywhere; most floods occur outside of identified flood plains (snow melts or flash rains, for example). Anyone can be vulnerable to this costly liability.
  • Earthquake coverage is available as a separate line of insurance. Earthquakes can occur anywhere, not just in California. If an earth tremor structurally damages your house, your budget might get rocked, too.
  • Comprehensive (H05 form) insurance offers broader coverage than a standard homeowners (H03form) policy, and can include things like lost or misplaced jewelry instead of theft only.
  • Personal umbrella coverage kicks in when you hit the limit on your policy. If you have home and auto policies, an umbrella will open over either policy once it’s reached its limit.
  • Inflation guard increases your dwelling coverage limits to match inflation (usually 2% to 4%). The cost to rebuild can be shocking in an inflationary spiral. Check with your agent to see if it’s built in to your policy or if you have to add it.
Schedule a review with your insurance agent

Now that you’ve nailed down the jargon, you’re in the know. Reach out to your insurance agent and set some new coverage limits. Build your risk liability plan and seal the gaps with a strong homeowners insurance foundation that protects you and your investment.

For more information

If you have questions about adding to your homeowners policy, reach out to our Personal Insurance team.

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.

Written content in blog post: Copyright © 2021 Applied Systems, Inc. All rights reserved.

Auto Insurance Coverage Lapse and Reinstating a Policy

| January 19, 2024
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Have you missed an auto insurance payment?

Life happens. The car breaks down, the kids get sick, an appliance fails. When the insurance bill arrives, you have every intention of paying it, but somehow you forget. The next thing you know, a cancellation notice arrives. You plan on delivering the payment in person to your insurance professional, but yet again, Murphy’s law intervenes and daily life gets in the way.

Coverage lapse

A few weeks later, you’re involved in an auto accident. When you call your insurance professional, you’re told a notice was sent before coverage was canceled. You have no insurance and the policy can’t be reinstated to cover the loss.

Unlike a missed cellphone payment, with auto insurance, there is typically no grace period. Your policy will expire at 12:01 a.m. following the expiration date if you miss the payment. While there may be some insurance companies that allow their customers to delay payments by a few days, you should contact your insurance professional before a delayed payment happens to see if this option is available to you.

If your vehicle is financed and there is a lapse in coverage, a lender may purchase an insurance policy to cover the vehicle and bill you for it. If the insurance premium remains unpaid, your lender may repossess the vehicle.

Reinstating a policy

Reinstating an insurance policy isn’t like reinstating your cable TV, with a flip of a switch. 

Many insurance companies are not willing to reinstate policies after the cancel for non-payment. This is true even with no losses or good payment history. This is a change from previous years. If you are going to be away or unable to have access to your billing notices for an extended period of time, please reach out to your trusted insurance professional to discuss tools that could help mitigate any billing issues in that situation.

While your insurance company can issue a new policy starting the next day, you will still show a lapse in coverage. And any losses that happened during that time will not be covered. There may also be a fee associated with reinstating your policy. In addition, your insurance company may raise your premiums on the newly issued policy.

Your insurance company will backdate your coverage only when you have signed a document stating you’ve had no losses during the coverage lapse. Backdating is particularly important in auto insurance policies because many states require drivers to maintain continuous insurance coverage. A coverage lapse could result in a penalty and the potential for license and registration suspension. In addition, most states assess fees for reinstating driver’s licenses and registrations.

Typically, missed premium payments are handled the same way in all lines of insurance. Most insurance companies offer several different payment plan options for your convenience, such as paying on a monthly, quarterly or yearly basis.

If you’re concerned about potentially missing an auto insurance payment and would like to discuss the payment options available to you, contact your insurance professional and begin the discussion sooner rather than later – before that ball gets dropped – to avoid any negative repercussions.

For more information

If you have questions about auto policies, reach out to our Personal Insurance team to learn more.

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.

Written content in blog post: Copyright © 2020 Applied Systems, Inc. All rights reserved.

10 Benefit Trends to Know in 2024

| January 19, 2024
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When it comes to employee benefits, no year is ever the same.

But recent years have made “different” seem like a vast understatement.

Expect more changes in 2024 as economic uncertainty and emotional burnout affect employee health and finances. Other driving forces will stem from generative artificial intelligence (AI), evolving workplace expectations, labor market fluctuations and the diverse needs of multigenerational workforces.

Let’s explore 10 areas in benefits that will receive increased focus this year:

  • Mental health
  • Evolving well-being
  • Professional development
  • Women’s health care
  • Workplace models
  • Employee burnout
  • Care for the caregivers
  • Decision support tools
  • Multigenerational choices
  • Strategic advisement
Mental health

Depression is being reported at record-high levels, notes the Business Group on Health. And more than one in three employees report deteriorating mental health, according to the industry news site BenefitsPRO. This data follows years of declining mental health.

Seventy percent of employers say mental health benefits will be a focal point in 2024, reports the Business Group on Health. As employers seek effective, research-based options, look for increasing awareness and usage of:

  • Employee assistance programs
  • Expanded in-network options for psychiatrists, psychologists and counselors
  • Access to substance use disorder services
  • Suicide prevention resources
  • Apps that diagnose mental health conditions and online courses that teach life skills like resilience, meditation, healthy eating and sleep habits
  • Mental health literacy programs
  • Cognitive behavioral therapy for stress, anxiety and depression
  • Evolving well-being

Given major disruptions to work and life in recent years, well-being continues to evolve in 2024. Employers will seek a multifaceted approach to employee wellness, including:

Physical wellness — The gold standard remains affordable, accessible and high-quality health coverage that encourages preventive care and adherence to medication. Engaging employees at risk of preventable chronic diseases will be a top goal of well-being programs this year. Employees are also growing more interested in proactive options like disability, accident and critical illness insurance.

Emotional wellness — Employee engagement, satisfaction and burnout remain critical. Workshops, personalized coaching and online courses can help employees build a growth mindset, resilience, adaptability and other skills to meet the challenges ahead.

Financial wellness — Financial wellness is a growing focal point for employees, especially among millennials and Generation Z. In-demand financial wellness benefits include debt and budgeting information, financial and retirement education, student loan repayment benefits and one-on-one meetings with financial advisers.

Social wellness — Organizations will be adding volunteer opportunities, community drives, employee recognition programs and office celebrations to draw people together and build goodwill.

Professional development

For many industries, the labor market remains tight. To attract and retain employees amid changing workplace expectations, look for renewed efforts in internal mobility and career-long learning. Trends include:

  • In-house training for new skills and roles
  • Industry certifications and custom education
  • Mentoring and coaching
  • Career pathing
  • Leadership development programs
  • Tuition reimbursement

Many organizations are also moving toward skills-based hiring. Skills-based hiring is based on technical and transferrable skills rather than educational degrees, university reputations or prior experiences. More companies are doing away with education prerequisites in job descriptions altogether.

These hiring practices can:

  • Help internal and external candidates better understand required skills
  • Increase employee engagement and retention efforts
  • Increase equity by prioritizing skills over similar connections or backgrounds
  • Expand the talent pool and improve employee diversity
  • Women’s health care

Family planning and women’s health often fall through the cracks of traditional benefits programs. Look for that to change in 2024, reports BenefitsPRO. Employers will increasingly address:

  • Prenatal care
  • High-risk pregnancies
  • Postpartum care
  • Pregnancy loss
  • Menopause

In addition to amending or expanding health plan coverage to better address women’s health, more employers will turn to lifestyle spending accounts (LSAs). Because LSAs provide post-tax financial benefits, women have more discretion over where to spend the money to address their individual needs.

Workplace models

More employers are bringing employees back to the office in 2024, but employees still want the flexibility of remote and hybrid positions. Inc. magazine says this disparity will continue to change the workplace. Potential points of emphasis include:

  • Ongoing evaluation of in-person, remote and hybrid workforces
  • Increased flexibility in scheduling and time off
  • A focus on company culture and workplace environments to reduce turnover
  • A wider net for job applicants, including national and global talent
  • Cross-training opportunities to improve professional development and organizational resilience
  • Understanding your culture and whether employees can get their work done off-site continues to be a critical task.
Employee burnout

Employees have been struggling with staffing shortages, long hours, poor communication and toxic work environments. These elements heighten the risk of burnout, an increasingly common challenge as 2024 gets underway. Look for employers to implement short- and long-term solutions, including:

  • Workload reviews emphasizing sustainability
  • Manager training to identify and address signs of burnout
  • Flexible work schedules
  • Reduced hours or four-day work weeks
  • Paid or unpaid sabbaticals
Care for the caregivers

Millions of employees juggle workplace duties while caring for children or elderly loved ones — and millions more leave the workforce entirely because of those duties. To improve the retention and well-being of employees, caregiver benefits will be a priority in 2024.

  • Popular caregiver benefits include:
  • Subsidized and backup child care services
  • Vetted resources for child care and elder care
  • Tours of residential facilities and other elder care options
  • Meetings with social workers
  • Tutoring services
  • Flexible hours
Decision support tools

Surveys reveal that employees typically spend less than 30 minutes picking their benefits each year. To increase awareness, appreciation and usage of benefits, more employers will turn to decision support tools to help employees select their benefits.

These tools may include:

  • Interactive Q&A formats to increase engagement
  • Generative AI to answer questions and guide employees to more optimal benefit selections
  • Voiceovers to add a human element and appeal to auditory learners
  • Compelling visuals of costs and risks to aid visual learners
  • Different languages to reach diverse employee populations

With costs continuing to rise, employees and employers both want health care dollars going toward the most impactful benefits. In addition, support tools that streamline the open enrollment process can help free up valuable time for your human resources team.

Multigenerational choices

Heading into 2024, four generations dominate the workplace. Your workforce might span from Gen Z teenagers to mid-70s baby boomers.

Generations aren’t homogenous, but they do show unique trends and preferences. Meeting the benefit needs of all generations can help you get the best from each.

Baby boomers provide valuable institutional knowledge and experience. They are looking for retirement planning and education.

Gen X is often referred to as the forgotten generation, but they are increasingly moving into leadership roles and taking advantage of a wide range of benefits. These include elder care, childcare, financial education and tuition reimbursement.

Since 2016, Millennials have made up the biggest percentage of the workforce. They have helpedto usher in remote work, student loan benefits and work-life balance, and they will continue to shape organizations from top to bottom for decades to come.

More members of Gen Z are entering the workplace each year, and the World Economic Forum predicts they will make up over 25% of the workforce by 2025. This generation is seeking increased focus on mental health, financial wellness, professional development and more customized benefit options.

To meet the needs of varying generations, many organizations will expand voluntary benefit offerings in 2024. These benefits, in which employees pay for some or all of the premium costs, allow you to meet the needs of a diverse workforce while saving health care dollars.

Common voluntary benefits include:

  • Life insurance
  • Disability, accident and critical illness insurance
  • Fertility treatments
  • Legal insurance
  • Long-term care insurance
  • Financial education and planning
  • Career development programs
  • Identity theft protection
  • Pet insurance
Strategic advisement

The Business Group on Health reports employers will be seeking more transparency and measurable results regarding vendor costs and outcomes. Many organizations will evaluate current contracts and new partnerships to improve the employee experience in 2024.

A study by the financial services trade association LIMRA revealed that employers are increasingly asking brokers and benefits advisers for support in this effort. Turn to your trusted advisers for information on:

  • Plans, pricing and networks
  • Employee engagement
  • Benefit trends
  • Legislation and regulations
  • Compliance efforts
  • Cost-saving initiatives
  • Third-party vendors

Stay in touch with your benefits adviser throughout 2024. They can help you match your benefit dollars to your most pressing business and employee needs, now and for years to come. For support on this or other Employee Benefit topics, please reach out to the OneGroup Employee Benefits team.

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.

Written content in blog post: Copyright © 2024 Applied Systems, Inc. All rights reserved.

When your life changes, your insurance should too.

| January 17, 2024
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13 life changes to tell your insurance agent about.

Life doesn’t stop after you obtain insurance coverage. Maybe you added that much-needed extra bathroom to your home or inherited your grandparents’ precious antiques. Perhaps your teenager is going to college or you’re starting a new business. You’ll need to adjust your insurance coverage to align with your new circumstances.

Here are 13 life experiences that should prompt a call to your insurance professional: 
  1. Getting married or divorced: Many insurance companies offer benefits like marriage discounts, multi car discounts and bundled insurance policies. If you’re getting married, you should insure your wedding and engagement rings since they’ll probably exceed the $2,500 jewelry limit in standard homeowners or renters policies. Create a new home inventory and increase your personal property coverage when you combine your belongings. If you’re going through a divorce, let your agent know. (Some divorce decrees specify insurance requirements.) You should adjust your policies, reflect name changes, update your life insurance and all listed beneficiaries. 
  2. Buying, renting or moving to a new residence: It would be terrible to lose your home in a fire or hurricane only to find out that you’re not insured. Make sure the policy limits are high enough to cover the cost to rebuild your home (different from market value). Even if you don’t own a place, you and your belongings need protection. A renters insurance policy will cover your personal belongings and offer added liability coverage (if someone is injured on your property or sues you). 
  3. Purchasing a car: Call your insurance professional with the make, model, and vehicle identification number if you buy a vehicle. Your insurance rate may change significantly depending on the vehicle type and your residence. 
  4. Becoming a business owner (even if it’s a home-based business): No matter where your business is located or how big it is, you’ll need coverage to ensure everything is properly protected. Take note of your business operations, even in a home business. If you use your car for business or store merchandise and supplies at home, you’ll need extra coverage. Ask your agent if a business owners policy (a “BOP”) is right for you. 
  5. Doing home renovations: Major improvements to your home, such as adding a new room, remodeling your kitchen or enclosing a porch can put you at risk of being under insured. An increase in the value of the structure may require an increase to your homeowners insurance coverage limits. 
  6. Having a new teen driver: When your teenager gets their driver’s permit or license, they need to be properly insured. Teen insurance can be pricy, so make sure they attend all the necessary driver’s education classes and keep their school grades elevated. And be sure to let your agent know so you can take advantage of any discounts. 
  7. Acquiring something expensive: Anytime you inherit or buy something valuable, you should reevaluate the contents coverage portion of your home or renters insurance policy. The policy limits may not be high enough. Compare the cost of increasing insurance on your valuables versus the cost of adding an umbrella policy to expand coverage ($1 million or more) over your home and auto. 
  8. Heading off to college: If your college student is moving to on-campus or off-campus housing, you should review your insurance policies to make sure their personal possessions and vehicle are adequately covered. 
  9. Installing a security or smart home system: Security systems deter theft and some smart home systems prevent catastrophic structural damage (like a whole house water shut-off system). Call your agent about insurance discounts for these systems, even if you’re only in the planning stages.
  10. Driving less: Working from home, living closer to your office or joining a carpool will reduce your mileage. Auto insurance companies consider less mileage a risk reduction, so you might be rewarded with a cheaper rate. 
  11. Buying a second home: Whether a beachfront property or a mountain getaway, don’t skimp on the insurance — especially if your second home will be vacant for long periods. If you rent your second home, ask your agent about landlord insurance. 
  12. Having your identity stolen: If you’ve been the victim of this kind of crime, you may want to invest in identity theft or cyber liability coverage to protect you and your family in the future. 
  13. Retiring: You might be able to get a discount on your homeowners insurance when you retire. In addition, if you regularly commuted to your job, your annual mileage may drop significantly.

Don’t forget to keep your insurance agent in the loop as your circumstances change. They’ll help you offset your financial liability and protect what’s important to you!

For more information

If you have questions about adjusting your policy for qualifying life changes, reach out to our Personal Insurance team to learn more.

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.

Written content in blog post: Copyright © 2020 Applied Systems, Inc. All rights reserved.

Risk Management 101: Managing a business, means managing risk

| January 17, 2024
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On December 6th, OneGroup hosted its final webinar of 2023 in the 101 Webinar Series. Paul Coderre, ARM, MBA, spoke about risk, risk assessment, and options for managing risk.

Whether you are a business owner trying to manage a business, an employee climbing a ladder at work, or an individual driving in a car to a sports game, we face risk every day of our lives.

The Risk management process consists of making, systemic, changes in order to minimize risk to an acceptable level.

During the 1950’s and 1960’s, Japan had just come out of war and had begun building its industrial complex. During this time, Japanese products were not considered to be the highest of quality. Not until W. Edwards Demming, Peter Drucker, and a few other industrial management ‘gurus’ visited Japan to help business owners develop a complex that today is used to build high quality products such as Honda, Toyota, Subaru, and many other successful electronics companies.

Demming and Drucker broke the basic goals of every business down into three key categories: survival, growth, and profitability.

Survival – The first focus of any organization is survival. Over the past few years – especially with COVID and the present-day economy – we have seen many organizations sell off or close their doors. A businesses’ survival is directly tied to effectively managing everyday risks.

Growth – It is said that if your organization is not growing it is dying. Organizations must focus on the growth of their staff, their management effectiveness, their product and their geography, if they are to survive and thrive.

Profitability – While profitability can be considered more of an outcome rather than a goal, profitability feeds survival and growth. It is vital to an organization’s success in a marketplace.

Success in business requires minimizing anything that threaten survival, growth or profitability. Therefore, success demands effective risk management.

Breaking Down the Risk Management Process

Risk identification. Risk identification is the first step in understanding an organization’s exposures that could lead to interruption of the production process. Ask yourself, what could possibly go wrong? Common risks can include such things as the market, in-house machinery, environmental factors, fire, social exposures, suppliers or vendors, and personnel.

Risk identification can be a long process and may take some time to adjust and fit into your day-to-day tasks. But, if you don’t identify the risk, it will, at some point, identify you.

Risk analysis. After you have identified the possible risks, ask yourself, how bad could it possibly be, and what is the likelihood of that happening? Risk analysis goes beyond simply placing a guard on a machine that does not have one. It involves digging into the risks that you identify and understanding what the threats to your business are, and how they will impact those three pillars of your business: survival, growth, and profitability.

How Do I Analyze and Prioritize My Risk?

Risk severity. How will this risk affect your business?

When looking at risk severity, businesses should think of both short- and long-term risks.

Paul broke identified risk down into three severity levels:

  1. It’ll shut the business down
  2. It will slow the business down
  3. It will have a low impact.

For example, if your business experiences one back injury, the short-term risk may not be that large. However, if you review the injuries from a long-term point of view and find that you have had 5, 6, or 7 back injuries and your experience modification increases, your insurance costs increase, or your exposure to OSHA goes up, those back injuries may pose a larger risk in the long-term than they do in the short-term.

Risk probability. What are the chances of this happening?

While considering the probability of something happening, also think of the severity of that event and how greatly it would affect your business. If it might happen, how often will it happen? What is the severity of the event? Even if it is unlikely to happen, is there is a very high severity? That may be an event that you should keep your eye on and focus more energy towards.

For example, your business may have a production process that uses some slightly hazardous chemicals. Are they controlled properly? What are the chances of something going wrong? Is it an old system that needs to be upgraded? Or is it a brand-new system that is very well managed?

Below is a chart used to demonstrate how to assess risk, decide what risks to address first, and how to move forward with certain opportunities.

Risk Assessment
 High ProbabilityLow Probability
High SeverityYou may have to tackle these first.You may want to tackle these second, as they can potentially have the biggest impact on your organization. Even though the probability is comparatively lower.
Low SeverityHow you address this will depend on the cumulative effect that this risk will have on your organization.These risks go at the bottom of the list. However, they still need to be monitored. It is very difficult to predict when the low probability or severity will change to high probability or severity.

As you identify present risks and anticipate others, analyze them, assess what could happen, assess the probability of them happening, and then prioritize them for your organization.

Risk management. We can’t escape risk, it is inherent to life. But, what can you do to make risks, “acceptable”? Though we can’t entirely eliminate risks, the goal is to prevent them from threatening your survival, growth, or profitability.

How Do I Manage The Risks That I Have Identified?

Risk avoidance. Let’s not do that.

Although a situation may have a great opportunity associated with it, it also may have a significant risk, that right now, your company cannot afford to take. Therefore, the best option in this situation may be to avoid the opportunity and risk all together.

Risk transfer. Let someone else take that risk.

When you have identified an event that has a high risk to your company and it is not a risk that you are willing to take, you can have someone else take that risk. The responsibility of the end product or outcome may still fall with your company, but the risk of a part of the operation may be offloaded.

Risk transfer is a common mechanism used often in the construction and manufacturing industry with subcontractors and vendors. Using vendors or purchasing insurance are both examples of risk transfer.

OneGroup hosted a 101 webinar in April of last year with contractual risk transfer experts Kirsten Shepard and John Schmitt who spoke on the topic of risk transfer and how it can be beneficial to your business. To learn more, please click here.

Risk control. What can you do to make the risk more acceptable?

Risk control is evaluating a situation, process, operation, or a product that your business manufactures, in conjunction with the risk associated with it, and reducing or eliminating that risk as much as possible through engineering, administrative or other means, to a level you are comfortable with and can accept.

For example, a construction site has construction workers working in an eight-to-ten-foot ditch. The risk associated with that situation is that the ditch could cave in and bury the workers in it. There are different risk controls for this situation. These controls can include trench boxes, trench supports, working outside of the trench, having methods of getting in and out of the trench, or even having administrative personnel on site to investigate the soils to assess the risk of the trench caving in and offer alternatives if needed.

Risk acceptance. I can live with that.

Risk acceptance can be the end result of combining the three previous mechanisms. It can also be assessing the risk identified and making the decision that in a certain position and given the present opportunity, your business can sustain that risk with minor, or no disruption.

These four risk management mechanisms can be used on their own, or in combination with one another. Because not all mechanisms will apply to all situations, they are not listed in any order based on priority, importance, etc.

Additional Thoughts Regarding Risk Management.

Without risk, there is no opportunity. Many times, we hear about risk as a bad thing. Risk itself isn’t necessarily a bad thing; poorly managed risk is a bad thing.

If as a business you want to survive, grow and profityou have to look for opportunities to do so. However, with those opportunities comes inevitable risk. Sometimes, opportunities that generate more high-value outcomes, higher revenues, more sustainability, more stability in an organization, carry more risk.

Avoid the, “find it, fix it” mentality. To effectively progress as a company, certain losses may be avoidable with proper risk management techniques. The, “find it, fix it” mentality is one where problems are fixed as they arise. However,  if the risk is not managed to prevent reoccurrence it will repeat and eventually instigate loss.The objective of effective risk management is to find a long-term solution to a problem.

Paul gave an example of a guard that continuously falls off of a machine. A company operating under the, “find it, fix it” mentality will put the guard back onto the machine over and over again, without discovering why the guard is being removed. An effectively managed organization will identify why the guard is off the machine and solve that problem.

The issue comes from how that organization is managing the risk associated with having machine operations.

If you want to be successful, you must manage to a solution, not just to a fix. A fix is thought of as a short-term problem solver whereas finding a true solution takes management, organizational, and systemic changes. There is a very direct correlation between companies that dive in and truly manage risks that they have with success and those companies that don’t with failure.

Do it already. The best step is the first step. To have an effective risk management program requires work and can be overwhelming. Start by taking an hour a day to just think about risk, it will become a lot easier once you start.

Integrate safety and risk management into the daily functions of your business. In many organizations, safety and risk management happen outside of the production process.

For example, productivity and quality are embedded in the day-to-day operation for front line workers, while safety and risk management are relegated to once a month safety committee meetings and safety training intended to remind employees of proper safety protocols. Because these measures are not integrated with everyday operations, their effectiveness is compromised.

Organizations that truly succeed have integrated safety and risk management into their day-to-day operations.

Find your comfort zone. When it comes to risk management and decisions, ultimately, it is your decision. 

Risk is inevitable. At any given time, things can change. Maybe your business loses a supplier, maybe the marketplace changes, maybe there is a natural disaster. Whatever the case may be, things are always changing.

Risk is fickle, complex, and interdependent. So, risk should constantly be looked at as it is constantly changing. No matter how many things change on a day-to-day basis, one thing remains the same – risk is inevitable. How you manage that risk determines your success as a business.

Contact us and OneGroup’s next 101 Webinar.

At OneGroup, risk management is one of our priorities and expertise. We are here to help you identify, asses, and manage your existing risk. As well as help you prepare for the inevitable risk in the future. If you have questions regarding this webinar or your company’s risk management program, please email Paul Coderre or reach out to one of our experts here.

Thank you to all who have tuned in to OneGroup’s 101 Webinar Series throughout this past year. Keep an eye out for topics and more information regarding OneGroup’s 101 Webinar Series in 2024!

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.

New York State DOL Updates

| January 10, 2024
OneGroup Coffee Cup Man in Suit Taking Notes Meeting

New York State Department of Labor Updates to Minimum Weekly Salary Threshold, Minimum Wage, and Hour Tip Credit

Effective January 1, 2024.

Minimum Weekly Salary Threshold Increases:

On Dec. 27, 2023, the New York State Department of Labor (NYSDOL) published a Notice of Adoption of its proposed regulations in the State Register, which means the minimum weekly salary to qualify for the executive and administrative exemptions will officially increase effective Jan. 1, 2024. The NYSDOL did not make any changes to its proposed regulations, so the following increases will occur:

For New York City, Nassau, Suffolk, and Westchester counties:

  • 2024 – $1,200.00/week ($62,400.00 per year)
  • 2025 – $1,237.50/week ($64,350.00 per year)
  • 2026 – $1,275.00/week ($66,300.00 per year)

For the rest of New York:

  • 2024 – $1,124.20/week ($58,458.40 per year)
  • 2025 – $1,161.65/week ($60,405.80 per year)
  • 2026 – $1,199.10/week ($62,353.20 per year)

There is no minimum weekly salary under New York law to qualify for the professional exemption. However, with a few exceptions (such as for teachers, doctors, and lawyers), employers still must comply with the federal minimum weekly salary in order to classify employees as exempt under the professional exemption. The federal minimum weekly salary is currently $684, but the U.S. Department of Labor has issued proposed regulations to increase that amount.

As a reminder, the classification of exempt or non-exempt is particularly important for determining which employees are (1) exempt from the overtime laws, meaning that such employees are not eligible to receive overtime pay, and (2) exempt from certain wage payment laws under New York Labor Law Article 6.

Hourly Tip Credit Increases:

The NYSDOL’s final regulations also include the following increases to the hourly tip credits that employers in the hospitality industry may use for the compensation of food service workers and service employees effective Jan. 1, 2024:

  • Food service workers – $5.35 tip credit/$10.65 minimum wage in downstate New York and $5.00 tip credit/$10.00 minimum wage in upstate New York; and
  • Service employees – $2.65 tip credit/$13.35 minimum wage in downstate New York and $2.50 tip credit/$12.50 minimum wage in upstate New York.

The NYSDOL’s final regulations also provide for increases to the hourly tip credits in the hospitality industry when the minimum wage increases in 2025 and 2026. In all regions of New York, the tip credit for food service workers will increase by $0.15 per hour on Jan. 1, 2025, and Jan. 1, 2026, and the tip credit for service employees will increase by $0.10 per hour on Jan. 1, 2025, and Jan. 1, 2026.

New York Minimum Wage Increases Effective January 1, 2024:

Also, as a reminder for employers, New York’s minimum wage increased January 1, 2024 and will continue to increase over the next couple years to the following rates:

For New York City, Nassau, Suffolk, and Westchester counties

  • 2024 – $16/hr
  • 2025 – $16.50/hr
  • 2026 – $17/hr

For the rest of New York:

  • 2024 – $15/hr
  • 2025 – $15.50/hr
  • 2026 – $16/hr

Notably, New York has a separate minimum wage for home care aides. Effective January 1, 2024, the minimum wage for home care aides increased to $18.55 an hour in New York City, Nassau, Suffolk, and Westchester counties, and $17.55 for the remainder of the state.

Employers should also make sure they have the most up-to-date wage notices posted at their workplace or job site.

Related Resources:

NYS DOL Overtime FAQ’s

NYS DOL Minimum Wage FAQ’s

NYS Minimum Wage Proposed Regulatory Text October 2023

Minimum Wage | Department of Labor (ny.gov)

FLSA Compliance Assistance Toolkit

For support on this or other HR topics, please reach out to the OneGroup HR Consulting team at HRConsulting@OneGroup.com.

Sources: bsk.com, natlawreview.com, dol.ny.gov

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.

Published Date: January 2024

How to Make Your Home Safer and Possibly Save Money

| January 9, 2024
Smart home automation: engaging house alarm security system

These four home improvements could lower your insurance premiums.

Whether you’re rebuilding your property after a disaster or planning a major renovation, it’s important to consider the impact that renovations could have on the cost of your home insurance.

1. Home security

Did you know many insurers offer discounts for protective devices, such as security alarms and deadbolts? DIY solutions like door and window locks are good deterrents, but a comprehensive security solution with third-party monitoring is more likely to affect your insurance rate. Your insurance company may even offer discounts for security cameras and motion-activated lighting.

Speak with your insurance professional to find out which measures are most cost-effective. Lowering your premium and the risk of a break-in is worthwhile.

2. Waterproofing

You don’t need to experience a major disaster to witness the destructive power of water. According to the Insurance Information Institute, one in 60 insured homes will suffer water damage this year. Thankfully, there are ways you can mitigate this risk and save on your insurance. How? A water cut-off device can actively prevent water damage caused by a leaky or burst pipe or faulty appliance. And it might qualify you for a discount on your insurance.

You might also want to consider upgrading the waterproof membrane in your basement and fitting a sump pump. These measures could save you thousands of dollars down the road.

3. Fire prevention and detection

As the number of electrical appliances found in the average home increases, the risk of overloaded circuits and electrical malfunction grows. In older homes, faulty wiring is a potentially life-threatening risk.

Do you live in a modern home? In this case, you benefit from more stringent fire safety building codes, but that doesn’t mean you are risk-free. According to a recent National Fire Protection Association report, the two leading causes of home fires are electrical failure and unattended electrical equipment.

Does your home have a well-maintained smoke alarm? Two-thirds of fire deaths occur in homes with missing or nonfunctioning smoke alarms. It is also worth fitting carbon monoxide alarms, heat detectors and home sprinklers. If you are undertaking major remodeling, look into using fire retardant cladding and roofing tiles. If converting your loft or basement, consider installing fire doors.

Do you live in an area prone to wildfires? You might want to consider additional measures, such as installing a fireproof barrier around your home. 

All of these measures could potentially reduce your insurance costs and, even more importantly, save the lives of you and your loved ones.

4. Storm-proofing

Renovating your roof is an expensive job. But if you use quality materials, you could see a discount on your insurance costs. Many insurance companies offer discounts for homes with hail-resistant roofs, while some insurance companies impose surcharges on homes that have not been upgraded to resist storm damage.

Have you thought about installing impact-resistant glass and storm shutters, or bracing unreinforced walls and chimneys? You might also consider installing an emergency generator on your property. This will ensure that if you are cut off from the main power source, all of your safety systems (fire alarm, sump pump, security alarm, etc.) will keep working.

Your home is likely the most valuable asset you will ever own. It’s important to have enough insurance to protect you should the worst happen. Speak with your insurance professional about the measures you can take to enhance your security and possibly save money on insurance costs.

For more information

If you have questions about how to make your home safer, reach out to our Personal Insurance team to learn more.

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.

Written content in blog post: Copyright © 2019 Applied Systems, Inc. All rights reserved.

The Grieving Families Act

| January 5, 2024
pexels pixabay 40568 2

A Legislative Update from OneGroup

Lynn Trentini, Business Insurance Account Executive, OneGroup

Earlier this week, it was announced that Governor Hochul had vetoed the Grieving Families Act (GFA) for the second time. This piece of legislation would have extended the length of time to bring a wrongful death claim, expanded the list of family members who would be eligible to file a claim, and allowed the recovery of non-economic monetary damages for grief and anguish. This is good news for the medical community, given the unanticipated financial consequences that could have resulted had it been signed into law.  

Although this bill was vetoed, there is still an opportunity for the legislature to override the veto with a two-thirds majority vote by both houses. In addition, insurance carriers anticipate that the bill will be reintroduced this year, either in its current format or with modifications, and seek passage again by both houses. As a result, lobbying efforts are expected to continue by insurance carriers, partner associations, and the medical community to advocate against this bill.

Many of our clients have asked to be updated as the situation evolves, and we are here to provide you with the most current information. 

If you have any questions or would like to discuss how this could impact your medical practice, please feel free to contact Brian Hurley at 315-708-3635.

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.

NLRB, Severance Agreements, and NLRA Rights

| January 2, 2024
Workers standing together

NLRB Says Severance Agreements Cannot Force Employees to Waive NLRA Rights

Employers may not offer employees severance agreements that require them to broadly waive their rights under the National Labor Relations Act (NRLA), according to a decision issued by the National Labor Relations Board (NLRB) on Feb. 21.

NLRB’s reasoning

The decision in the case McLaren Macomb, involved severance agreements offered to furloughed employees. The agreements prohibited the employees from making statements that could disparage the employer and from disclosing the terms of the agreements. 

Simply offering employees a severance agreement that requires them to broadly give up their rights under Section 7 of the NLRA violates Section 8(a)(1) of the NLRA, according to the NLRB:

“We…return to the prior, well-established principle that a severance agreement is unlawful if its terms have a reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights, and that employers’ proffer of such agreements to employees is unlawful.” 

In a press release, NLRB Chairman Lauren McFerran said, “It’s long been understood by the Board and the courts that employers cannot ask individual employees to choose between receiving benefits and exercising their rights under the National Labor Relations Act. Today’s decision upholds this important principle and restores longstanding precedent.” 

Seek counsel as needed

Employers often offer departing employees severance agreements in exchange for a promise not to sue, among other things. However, as this decision illustrates, there are potential pitfalls to watch out for. Seek counsel to ensure your severance agreements are legally compliant and enforceable.

For more information

If you have questions about these changes, reach out to our Human Resources Consulting team to learn more.

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.

Written content in blog post: Copyright © 2023 Applied Systems, Inc. All rights reserved.

2024 IRS Retirement Plan Limits

| December 29, 2023
Time of saving value money : Coin calculator and clock, Idea of value to finance and saving money.

The IRS has released its 2024 inflation-adjusted limits for qualified retirement plans.

It also announced the maximum annual compensation used for calculating benefits and contributions and for nondiscrimination testing. In addition, the Social Security Administration published its limit on wages subject to Social Security taxes. All of this information is summarized in the charts below.

2024 Limits for Retirement Plans

The annual elective deferral limits have increased for 401(k), 403(b), 457(b), savings incentive match plan for employees (SIMPLE) plans, individual retirement accounts (IRAs) and Roth IRAs. 

In addition, the overall annual limit on employee and employer contributions for defined contribution (DC) plans has increased for 2024, as has the maximum annual benefit that can be paid out by a defined benefit (DB) plan.

20232024
401(k), 403(b) and 457(b) elective deferrals$22,500$23,000
IRA/Roth IRA contributions$6,500$7,000
SIMPLE deferrals$15,500$16,000
DC plan annual contribution maximum$66,000$69,000
DB plan annual benefit maximum$265,000$275,000
2024 Catch-up Contributions

In eligible retirement plans, employees age 50 and older can contribute additional amounts, known as catch-up contributions, beyond the limits noted above. The IRS limits for catch-up contributions remain the same for 401(k), 403(b), 457(b), SIMPLE, and IRA/Roth IRA plans. 

20232024
401(k), 403(b) and 457(b) plans$7,500$7,500
SIMPLE plans$3,500$3,500
IRA/Roth IRA plans $1,000$1,000
Compensation and Social Security

The IRS sets a limit on the amount of compensation that can be used to calculate benefits and contributions. This amount also applies to general and 401(k) nondiscrimination tests. In addition, the Social Security Administration places a limit on wages subject to Social Security taxes. All of these amounts have increased for 2024.

20232024
Highly compensated employees$150,000$155,000
Key employees/officers$215,000$220,000
Maximum amount of compensation for benefit calculations and nondiscrimination testing$330,000$345,000
Social Security wage base$160,200$168,600
For More Information

Share the relevant figures with your employees to keep them informed and in compliance. If you have questions about these limits or how they apply to your retirement plans, reach out to our Human Resources Consulting team to learn more.

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.

Written content in blog post: Copyright © 2022 Applied Systems, Inc. All rights reserved.