Widespread adoption of self-driving technology may be just around the corner. Whether you’re looking forward to a more relaxing morning commute or dreading the day you hand over your keys to a machine, here’s a look at what’s new in autonomous vehicles.

Public opinion is low.

Before self-driving technology can take over our roads, people need to accept it.

According to a survey from AAA, 66% of U.S. drivers are fearful of self-driving cars, while another 25% are uncertain about the technology. Although people are interested in semi-autonomous technology like reverse automatic emergency braking, recent incidents involving autonomous vehicles have left the majority of people feeling uneasy about handing over complete control to a machine.

However, the tide could be turning, at least according to an article from TechCrunch. Self-driving cars were on display in Las Vegas for CES 2025, with Waymo and multiple startups showing off autonomous vehicles, and people seemed excited about the technology. Meanwhile, Reason reports that Waymo has expanded its operations in multiple cities and now provides 100,000 driverless rides a week.

High-profile accidents add to concerns.

Self-driving cars have already been involved in a number of accidents. According to KWTX, a driver says his Tesla was in self-driving mode when it hit a parked police vehicle, while CBS News says federal regulators are looking into a fatal crash that may have involved a Tesla using its full self-driving system.

Of course, human-driven vehicles are involved in crashes every day, a point Waymo is trying to make with its Safety Impact webpage. According to Waymo’s analysis, a comparison between Waymo vehicles and human drivers in three cities shows that Waymo had 83% fewer crashes involving airbag deployment, 81% fewer injury crashes and 64% fewer police-reported crashes.

Remote-controlled cars are no longer just toys.

When you think of remote-controlled cars, you probably think of the toys you used to play with as a child. These days, however, remote-controlled cars aren’t just for kids. They’re a real form of transportation, and an alternative to true autonomous technology.

According to For Construction Pros, construction equipment that’s controlled remotely has the potential to increase safety and has been gaining acceptance. Meanwhile, according to The Truth About Cars, Ford Pro is working on features that would let fleet managers control maximum speed, acceleration, locks and ignition remotely.

Jalopnik reports that Phantom Auto has been able to test its remote-controlled vehicles in California without having to get a permit.  Because the cars do have a driver – albeit one who’s not in the car – the state’s self-driving regulations don’t apply.

Legislation has a bumpy road.

As more and more companies test self-driving technology on public roads, many people are calling for clear legislation. According to the National Conference of State Legislatures, 29 states and Washington D.C. have enacted legislation governing self-driving technology. In 41 states, autonomous vehicle legislation has been considered.

At the federal level, the U.S. Department of Transportation has developed the Automated Vehicles Comprehensive Plan as part of its initiative to prioritize safety.

Need insurance for your “regular” car? The Heffernan personal insurance division can outfit you with cutting edge protection for your car, home, boat and other recreational equipment. Is it time for a coverage review? Contact us!

The economy has its ups and downs, but, with good planning, your financial situation doesn’t have to suffer. Recent market turmoil has many business owners and individuals worried about their financial security. Now is the time for proactive steps to maintain financial wellness.

Don’t Let Panic Guide Your Investment Decisions

When stock prices plummet, investors become understandably nervous. No one likes to see their portfolio values tumble. However, it’s important to think carefully before making any decisions you might come to regret.

It’s impossible to predict what the market will do next, but history should provide some comfort. Morningstar says the stock market has crashed – meaning the market dropped by at least 20% – 19 times over the last 150 years or so. In every instance, the market has recovered and gone on to reach new heights.

This means that, if you don’t need your funds in the near future, you might like to sit tight and wait out a market crash. You might even consider making additional investments to take advantage of the low prices or to diversify your portfolio. On the other hand, you may decide you want to sell certain investments or rethink your current investment strategy. Just make sure you’re doing so with a financial strategy in mind to avoid giving in to panic.

Prepare for the Worst

The economy will improve eventually, but things could become worse before they get better. A CNBC survey found that 60% of CFOs think a recession will occur in 2025. The following steps will help you prepare:

• Bolster your emergency savings. An economic downturn tends to bring layoffs and reduced spending, hurting both workers and business owners. This is a good time to ensure you have enough savings to get through an unexpected financial hardship. Individuals and families should consider whether they have sufficient emergency savings. Small businesses may likewise benefit from increased cash reserves, in case revenues drop.
• Cut costs where possible. Both individuals and business owners should consider tightening their budgets. For individuals and families, this may involve cutting back on luxuries. For business owners, it involves focusing on marketing activities with the best ROI or negotiating lower costs for rent and supplies.
• Make sure your money is safe. Bank failures are rare, but they are possible. The FDIC says one bank failure occurred in January 2025, two in 2024, and five in 2023. The FDIC insures deposits, but keep in mind that the insured amount is limited to $250,000 per depositor, per insured bank, per ownership category.

Protect Your Assets with an Insurance Strategy

If you’re hit with a personal hardship in the midst of an economic downturn, recovery may be extra challenging. The right insurance strategy will help you protect your assets.

In addition to the personal insurance staples like homeowners, car, life, and health insurance, you may want to consider additional coverage types. For example, if you have a dog or cat, pet insurance could help you manage unexpected veterinary care.

Insurance policies are also critical for small business owners. A ransomware attack that shuts down your operations, a natural disaster that forces you to evacuate, or a lawsuit alleging that your company caused harm would be bad under the best conditions. When revenue is down, though, any of these scenarios could be catastrophic. Consider whether you have enough coverage to guard against lawsuits, cyberattacks, and other unforeseen losses.

Work with a Financial Planner

The above is not investment advice. If you want financial and investment advice – a smart idea any time but especially during periods of economic uncertainty – work with a financial planner.

A financial planner can assess your financial situation and portfolio to provide you with investment advice and asset protection strategies that cater to your specific needs.

Did you know that Heffernan Insurance Brokers offers financial services? As we are an independent firm and fiduciary, you can count on us for objective guidance that puts your best interests first. We offer portfolio review and management, asset protection strategies, estate and financial planning, investment advice, insurance planning, and more. Our experts can help you navigate market turmoil and economic uncertainty with confidence. Learn more.

Want to beat the odds as a small business owner? While many small businesses fail, a good insurance strategy may shield you from financial catastrophe. Make sure you’re protected by taking out the most essential insurance policies for small businesses.

Commercial General Liability Insurance

Commercial general liability insurance is a staple of business insurance – and for good reason. It provides coverage for third-party bodily injury and property damage claims. Whether you’re a shop owner who’s worried about a customer falling on your premises or a contractor worried about accidentally damaging a client’s property while performing work, this is an essential insurance policy to own.

Commercial general liability insurance also provides coverage for third-party personal and advertising claims. For example, if you run an advertisement for your business and someone claims that an image in it infringes on their copyright or that the wording amounts to defamation against your competitors, your general liability insurance policy could cover you. Other important coverage includes false arrest and wrongful eviction.

Commercial Property Insurance

If you have a physical location, you’ll benefit from commercial property insurance, no matter whether you own or lease. In fact, your mortgage or lease agreement may require you to maintain this coverage.

Commercial property insurance covers the building as well as the business assets inside, such as your inventory, equipment, furniture, and supplies. A standard commercial property insurance policy covers many common loss events, including fire, wind, hail, and vandalism. However, policies typically exclude some perils, including floods, earthquakes, and mud flows, meaning you may want to consider purchasing additional coverage. Policies also exclude damage from wear and tear.

Business Interruption Insurance

Many small businesses have limited cash reserves and therefore depend on steady cash flow. If a natural disaster forces you to shut your doors for days, weeks, or even months, you might be unable to recover. Business interruption insurance helps by making up for lost income during a covered event. Business interruption insurance is typically tied to commercial property insurance and usually provides coverage for the same perils.

Commercial Auto Insurance

If your business owns any vehicles, you need commercial auto insurance.

When commercial vehicles are involved in crashes, costly lawsuits and massive jury awards are common – and small businesses are not immune to this risk. For example, Daily Local News says a bicyclist was awarded $29 million after a plumbing company truck collided with him and caused him severe injuries.

To shield yourself from this risk, consider whether your liability limits are high enough. You can increase your limits on all underlying liability policies – including commercial auto insurance – by buying umbrella liability insurance.

Also consider whether you need hired and non-owned auto insurance. If you have employees who use their personal vehicles for business purposes, hired and non-owned auto insurance will provide liability protection for your business in the case you are named in a lawsuit. The car owner still needs to maintain personal auto insurance, but this coverage does not protect your business.

Workers’ Compensation Insurance

State law requires most employers to maintain workers’ compensation insurance. If you have employees, this is likely non-negotiable. Workers’ compensation provides vital protection for employees who experience work-related injuries or illnesses and protects employers from lawsuits over work-related injuries and illnesses.

Other Insurance Products to Consider

Depending on the nature of your business, you may need additional insurance policies. Some common policy types to consider include:

• Cyber insurance – Provides coverage for cyberattacks and data breaches. Hackers target businesses of all sizes. A cyber event may be particularly devastating for small businesses.
• Professional liability insurance – Also called errors and omissions insurance, this covers lawsuits alleging financial loss stemming from errors, omissions, or negligence in your professional services.
• Employment practices liability insurance – Provides coverage for lawsuits alleging wrongful employment decisions, discrimination, and harassment. If you have employees, employment practices liability insurance will provide you with valuable coverage.
• Employee benefits – Helps small businesses achieve their recruitment and retention goals while promoting employee engagement and wellbeing.

Is your small business protected? Heffernan Insurance Brokers provides tailor-made insurance packages for small businesses. We’ll work with you to review your coverage needs and create an insurance package that protects your assets. We can also help you explore cost-saving strategies, such as using a business owner’s policy to bundle coverages. Learn more.

Insurance for food and beverage companies should be as unique as the risks these companies face. Does your insurance adequately cover your risks? Ask the following seven questions to make sure.

1. Do you have coverage for recall risks?

Recalls are a constant threat in the food and beverage industry. According to the U.S. PIRG Education Fund, there were 296 food recall announcements in the U.S. in 2024 – a decrease of 5% compared to 2023. However, there were multiple high-profile recalls, including the Boar’s Head meat and the McDonald’s Quarter Pounder recalls. Furthermore, serious illnesses resulting in hospitalization or death from contaminated food nearly doubled, with recalls due to salmonella, listeria and E. coli up by 41%.

Food recalls are often expensive due to the lost product and retrieval and disposal costs, not to mention the potential damage to a company’s reputation. Product liability insurance covers lawsuits arising from contaminated or mislabeled food, but it does not cover recall costs. For this reason, product recall insurance is an important coverage for any food and beverage company.

2. Do you have coverage for cargo theft?

Verisk CargoNet says cargo theft reached a record high in 2024, with food and beverage shipments as the most frequently-targeted type of commodity. With the risk rising, having sufficient motor truck cargo insurance is critical.

3. Do you have coverage for cyber and fraud risks?

Food manufacturers and distributors are vulnerable to cyberattacks, social engineering, and other types of fraud. A ransomware attack could shut down operations, leading to massive business interruption costs and putting food at risk of spoilage. Other attacks could target funds or even food shipments. The FBI has warned that criminals have used business email compromise tactics to divert large shipments of food. To guard against these risks, food and beverage companies need cyber and crime policies with sufficient coverage for cyberattacks as well as for social engineering scams and fraud.

4. Would you survive a nuclear verdict?

Oversized jury verdicts (often called nuclear verdicts) are on the rise. According to the U.S. Chamber of Commerce, nuclear verdicts increased in frequency between 2013 and 2022 (if you exclude the pandemic years, when many courts closed temporarily). Although any jury verdict of at least $10 million is a nuclear verdict, the median nuclear verdict during this period was more than double that: at $21 million. Product liability accounted for 23.3% of nuclear verdicts, while auto accidents accounted for 23.2%, making this a major concern for companies involved in food manufacturing and distribution. Umbrella liability insurance provides an extra layer of protection.

5. Do you have coverage for supply chain disruption?

Before food makes it to the table, it typically goes through a number of steps involving multiple companies. Something that goes wrong on the other side of the country or even the world – whether it’s a natural disaster, cyberattack, outbreak of bird flu, or something else – may impact your operations. Contingent business interruption that provides coverage for third-party disruptions will protect your bottom line.

6. Do you have coverage for equipment breakdown risks?

Food and beverage manufacturers tend to rely heavily on expensive equipment. If that equipment stops working, you’ll face costly business disruption losses on top of expensive repair or replacement costs. To prevent financial disaster, it’s important to have sufficient coverage for your equipment. Review your commercial property insurance to make sure you have adequate coverage for your equipment in the case of a fire, storm, or other covered loss. However, it’s important you understand that this will not provide protection against equipment breakdown – for that, you need equipment breakdown insurance, sometimes called boiler and machinery insurance. Also consider whether you have coverage for damage caused by cyber events.

7. Has an expert in food and beverage insurance reviewed your insurance coverage?

Each business is unique. A broker who understands the food and beverage industry can help you understand your risks to ensure you secure appropriate coverage.

Heffernan Insurance Brokers provides customized insurance for food and beverage companies, including growers, packers, manufacturers, and distributors. We will help you find the coverage you need – from motor truck cargo and warehouse legal liability insurance to pollution legal liability and product contamination and brand rehabilitation coverage. Learn more.

It’s a difficult time for nonprofit organizations. With insurance challenges, economic pressures, and regulatory upheaval, many feel threatened. Some may be looking to cut costs wherever possible, including by reducing their nonprofit insurance. At the same time, risk management is more important than ever, so it’s important to consider your options carefully before proceeding.

Federal Funding Is Under Threat

On January 20, 2025, an executive order established the Department of Government Efficiency, commonly known as DOGE. As of April 1, DOGE says it has saved $140 billion (or $569.57 per taxpayer) by making cuts to numerous agencies and programs. Grants have also been on chopping block – so far, it has terminated at least 7,616 grants, including grants made through the Department of Education, USAID, and the Department of State.

Attempts to end federal funding have been met with strong opposition. On January 27, an executive order aimed to pause federal grants, loans, and other financial assistance. According to the National Conference of State Legislatures, this was rescinded on January 29. Then, on February 10, Judge John McConnell of the U.S. District Court for the District of Rhode Island issued an order to unfreeze funds.

While the political and legal battles rage , many nonprofit organizations are left in limbo. The Urban Institute says two out of three nonprofits receive at least one government grant or contract. Nonprofit Quarterly says the threat to federal funding has nonprofit executives trying to figure out how to deal with what could be a massive crisis. According to CalMatters, the executive director of the County Welfare Directors Association says local agencies are worried that cuts could impact job assistance, in-home supportive services, foster care, and adult protective services programs.

Economic Uncertainty Could Make Conditions Worse

The threats to funding come at a particularly bad time. According to a report from the U.S. Department of Housing and Urban Development, homelessness reached record levels in 2024. The Center on Budget and Policy Priorities says food insecurity increased from 12.8% in 2022 to 13.5% in 2023, marking the second consecutive year of rising rates and a reverse of the two-decade trend of falling rates.

The situation could become worse. Expana forecasts a global recession starting in the spring of 2025, while U.S. News says there’s a 27% chance of a U.S. recession sometime in the next 12 months, based on the New York Fed’s recession probability model.

When the economy suffers, nonprofits are hit with a double whammy of increased demand for services and decreased donations. Indeed, the 2024 Giving USA report found that donations from individuals decreased by 2.4% in 2023, when adjusted for inflation. The drop is attributed to uncertain economic conditions and high inflation. If the economy worsens amid drastic federal funding cuts, the situation could become much worse than usual.

Obtaining Insurance Coverage Is Becoming More Challenging

According to the Council of Insurance Agents & Brokers, the fourth quarter of 2024 marked the 29^th consecutive quarter of rising commercial property and casualty insurance rates. However, many lines – including D&O, cyber, and EPLI – are now seeing rate decreases.

The challenges facing the nonprofit sector go beyond the general insurance market. For some nonprofits – particularly foster care agencies – securing insurance coverage has become extremely challenging. New legislation (including statute of limitations reform and California’s Foster Agency Accountability Act) has had a significant impact on the market. Costs have been rising, with some markets also experiencing shrinking coverage capacity.

Navigating Insurance Amid Financial Uncertainty

Many nonprofit leaders are in crisis mode. They’re busy examining their funding options and determining where they can cut costs to survive the years ahead. They may see insurance as a place for cuts, especially as premiums rise and coverage becomes harder to find. However, it’s important to keep in mind why insurance premiums are rising: losses have also been rising. Wildfires and other natural disasters have led to massive property damage, while litigation trends that include social inflation, nuclear verdicts, and legal reform have resulted in increased liability risks. Cutting insurance may save you a little money in the short term but leave you vulnerable to catastrophic costs in the future. For many nonprofits, it’s also important to stay compliant with state requirements for insurance coverage.

This is not to say that cuts are impossible – in some cases, nonprofits may be able to thoughtfully manage their coverage choices to save money. Strategies include taking on bigger deductibles or self-insured retentions.

During times of crisis and uncertainty, risk management is more important than ever. An experienced insurance partner can figure out what you can cut and what is essential coverage.

A broker who understands the current market for nonprofit insurance can guide you through your options when insurance difficult to find to avoid coverage gaps. See how Heffernan Insurance Brokers can help.

The current labor shortage and increased awareness of sexual harassment are causing the construction industry to take a new look at how it recruits and retains women in the workforce.

The Construction Skilled Labor Shortage

After falling during the COVID-19 pandemic, construction spending is up again. The American Institute of Architects says the construction spending on nonresidential projects increase by 20% in 2023, followed by smaller gains, while the National Association of Home Builders says all geographic regions saw single-family construction growth at the end of 2024.

But there is a downside to all this growth: a shortage of skilled labor. As experienced workers reach retirement age, the construction industry is scrambling to find enough skilled workers to meet growing demands.

Women could be a largely untapped source of new workers. According to the U.S. Bureau of Labor Statistics, only 11.2% of construction workers are women. Construction companies struggling to find new employees should assess what they’re doing to attract women.

Safety Issues

The Occupational Safety and Health Administration (OSHA) has been working with the National Association of Women in Construction (NAWIC) to facilitate a safe work environment and to understand the rights of workers and the responsibilities of their employers.

This is important because women sometimes face additional hazards in the workplace. According to For Construction Pros, personal protective equipment selection, sanitation, and workplace intimidation and violence are key concerns.

Personal protective equipment designed for men may not fit women properly, and this can represent a serious safety hazard. OSHA has addressed this with a new final rule that explicitly requires personal protective equipment to fit properly. This rule is expected to improve safety for women as well as other workers who tend to have a hard time finding equipment that fits properly, such as larger workers.

Sexual Discrimination

Providing a safe and healthy work environment also means providing a workplace that is free from sexual discrimination. This includes creating hiring and pay policies that do not discriminate against women.

It’s also important to create a workplace that does not allow sexual harassment. As the #MeToo movement and the downfall of men like Harvey Weinstein have shown, women are taking a stand against workplace harassment. Although much attention has been given to Hollywood, other industries – including construction – should also take note.

Construction firms that are accused of sexual harassment or sex-based discrimination could face costly lawsuits. In one example, the EEOC says Balfour Beatty Infrastructure, a highway construction company, had to pay $80,000 to settle a lawsuit alleging sexual harassment and discrimination.

To avoid legal, morale and reputational damage, employers should do the following:

• Create and enforce a written policy that defines and prohibits sexual harassment.
• Create a procedure for reporting sexual harassment.
• Respond promptly and thoroughly to complaints of sexual harassment and take appropriate action against offenders.
• Never retaliate against employees for reporting sexual harassment or respond to complaints dismissively.
• Provide sexual harassment training, especially to supervisors, after an incident or as required by state law.

As always, Heffernan Insurance is your partner in construction insurance and risk management. Contact us with any questions you may have.

The National Safety Council designates April as Distracted Driving Awareness Month. This annual campaign is intended to raise awareness about the dangers of distracted driving and encourage drivers to minimize potential distractions behind the wheel.

Distracted driving contributes to nearly 400,000 injuries and 3,000 fatalities each year, according to the National Highway Traffic Safety Administration.

Distracted Driving Overview

The Centers for Disease Control and Prevention defines distracted driving as any activity that may divert a motorist’s attention from the road. There are three main types of distractions that can interfere with drivers’ attentiveness:

1. Visual distractions involve motorists taking their eyes off the road. Some examples include reading emails or text messages, looking at maps or navigation systems, and observing nearby accidents or roadside attractions while
2. Manual distractions entail motorists removing their hands from the steering wheel. Key examples include texting, adjusting the radio, programming navigation systems, eating, drinking and performing personal grooming tasks while
3. Cognitive distractions stem from motorists taking their minds off Primary examples include talking on the phone, conversing with vehicle passengers and daydreaming while driving.

Regardless of distraction type, distracted driving is a serious safety hazard that causes a significant number of accidents on the road. As such, it’s crucial to take steps to prevent distracted driving.

Prevention Measures

During this annual event and beyond, it’s imperative for businesses to educate their employees about distracted driving hazards and related prevention measures. Specifically, businesses should share the following guidance with their drivers:

Put phones away. Drivers should silence their phones and store them out of reach to avoid checking them behind the wheel.

Plan every trip. Before hitting the road, drivers should program their navigation systems and familiarize themselves with their journeys.

Utilize in-vehicle technology. Drivers should leverage any technology within company vehicles that promotes safe driving, including hands-free communication devices, voice-activated controls and telematics solutions.

Avoid multitasking. While driving, it’s best for drivers to refrain from completing additional tasks, such as eating or adjusting the radio.

Stay focused. By keeping distracting conversations to a minimum and looking straight ahead, drivers can fully concentrate on the road.

Maintain compliance. Drivers should comply with all company policies and applicable laws regarding distracted driving. Contact us today for additional risk management resources.

Both commercial and personal auto insurance rates have been climbing for some time now – but why? Insurance rate trends are largely driven by claims trends. Recent auto claims trends have been characterized by growing risks and rising costs.

Claims Severity and Frequency Have Surged

LexisNexis reports that auto claims have increased in terms of both frequency and severity since the COVID-19 pandemic. Bodily injury severity is up by 20% and material damage severity is up by 47%, while total loss claims have increased by 29%.

It’s impossible to point to a single reason for the surge. However, multiple factors appear to be contributing to the problem, including reckless driving, repair costs, and litigation.

Reckless Driving Is Up

Blame it on stress; boredom; or the temptation of nearly empty roads. Regardless of the reason, reckless driving surged during the COVID-19 pandemic. We are still feeling the impact today.

A study by IIHS on Virginia drivers found that speeding by at least 10 mph increased by more than 50% between March and June 2020. This could explain why traffic fatalities increased by 7% in 2020 even though the number of miles driven plummeted. NHTSA data shows that the biggest increases in fatal crashes involved speeding or alcohol and unbelted vehicle occupants.

The pandemic has ended, but many people think reckless driving habits have become more common. In a survey from Pew Research Center, 49% of respondents said people are driving more dangerously than they did before the pandemic, compared to only 9% of respondents who said they’re driving more safely.

Distracted driving is also a problem, especially among young drivers. According to LexisNexis, distracted driving violations among Gen Z drivers have increased by 24% compared to 2022 and by 66% compared to 2019. However, this is not just a Gen Z problem – across all ages, distracted driving increased by 10% from 2022 to 2023.

Repairs Are Slower and More Expensive

Another pandemic-related change has contributed to higher auto claims: repairs have started to take longer and cost more. Faced with labor shortages and supply chain disruption during the pandemic, many auto repair shops developed long backlogs. The J.D. Power 2023 U.S. Auto Claims Satisfaction Study found that auto insurance repair times nearly doubled between 2021 and 2023, reaching 23.1 days. In 2024, J.D. Power says repair times improved somewhat, averaging 18.9 days. However, that’s still noticeably longer than the repair times before the pandemic.

Longer repair times may lead to larger claims costs. The longer the claim drags on, the greater the administrative costs. Insurers may also incur additional costs due to rental coverage.

On top of these challenges, auto insurance claims costs are rising due to the changing nature of vehicles. As vehicles adopt more sophisticated technology, repairs become more costly. A car bumper loaded with sensors and cameras may help you avoid a crash, but, if you crash, that bumper will be expensive to repair. Even minor crashes may necessitate costly repairs and realignments.

The rise of electric vehicles is also a factor. According to Kelley Blue Book, electric vehicles cost 30% more to repair than gas-powered vehicles.

Litigation Is Adding to the Problem

Social inflation and nuclear verdicts have been leading to huge jury verdicts against transportation companies. Research from the Insurance Information Institute found that the inflationary total of $21 billion in auto insurance claims between 2014 and 2019 is due to social inflation. Some jury awards – such as a $141.5 million nuclear verdict against a small Florida trucking company (as reported by FreightWaves) – are astounding.

However, social inflation isn’t just an issue for commercial auto insurance. In a study from the Insurance Research Council, 89% of people recalled seeing attorney advertising in the past year and 52% of people thought attorney advertising increased the cost of insurance.

What Should Drivers Do?

The increase in claims costs is hard on insurers, but the resulting increase in insurance rates is hard on drivers and business owners. However, there are steps that you can take:

• Embrace cameras. Businesses should use dashcams and in-cab cameras to promote safe driving and ensure drivers who are not at fault are exonerated after a crash. Individual drivers may also like to invest in dashcams – if someone tries to stage a crash, a dashcam may be the only proof you have.
• Consider telematics. Businesses should use telematics to identify risky driving habits and improve operational efficiency. Individual drivers may also benefit from telematics and usage-based insurance programs, especially if they’re safe, low-mileage drivers.
• Drive safely. The most important thing to do to keep claims and costs down is to be a safe driver. Don’t speed, don’t drive under the influence, make sure everyone in the vehicle is using a seatbelt, and give the road your full attention. Encourage your family members and your colleagues to adopt safe driving habits.

Are you looking for personal or commercial auto insurance? Heffernan Insurance Brokers can help. Contact us.

Social inflation and nuclear verdicts are driving up costs, while evolving risks are keeping business leaders and risk managers on their toes. Let’s take a look at what’s happening in the realm of liability litigation.

Social Inflation and Nuclear Verdicts

The Council of Insurance Agents & Brokers (CIAB) says rates for umbrella liability insurance were up by an average of 8.7% in the fourth quarter of 2024 and by 8.6% in the third quarter. While these hikes are steep (especially compared to the more moderate increases of most other lines), they are not nearly as high as the 22.9% price hike of the third quarter of 2020.

According to CIAB, industry experts agree that social inflation is largely to blame. Costs have increased, litigation is more likely to drag on, and nuclear verdicts of $10 million or more have become more common. The Institute for Legal Reform reports that nuclear verdicts have become larger, especially in product liability, auto accident, and other trials involving allegations of negligence. In 2013, the median product liability nuclear verdict was $24 million. In 2022, it had grown to $36 million.

Companies of all sizes can be targeted as the follow examples show:

• Reuters reports that a Missouri jury ordered Johnson & Johnson to pay $4.69 billion to 22 women who said the companies talc products caused ovarian cancer.
• FreightWaves reports that a small Florida-based trucking company was hit with a $141.5 million nuclear verdict.

Furthermore, a lawsuit doesn’t need to involve death or severe bodily injury to go nuclear. For instance, The National Law Review says a San Diego jury was awarded an $11.2 million verdict in a workplace discrimination lawsuit.

A variety of factors may be contributing to the increase in jury awards and overall litigation costs, including anger against big companies viewed as uncaring and the use of reptile theory tactics that play on instinctive fears as well as increased attorney involvement and third-party litigation funding. According to Research Nester, the litigation funding investment market is currently valued at $17.5 billion and is expected to reach $67.2 billion by 2037.

Evolving Risks and Litigation Trends

Litigation costs are rising, and the exposures triggering these lawsuits continue to emerge and evolve. Currently, key exposures include:

• PFAS Litigation. PFAS (also called forever chemicals) have been linked to serious health problems, which has triggered a wave of litigation that Time says could eventually eclipse the litigation against Big Tobacco. Recently, the City of Savannah filed a lawsuit against several PFAS manufacturers and users of PFAS. The National Law Review says the lawsuit is significant for manufacturers, as it suggests that companies could be sued for PFAS pollution even if they didn’t intentionally use PFAS in products or processes.
• Product Liability. Supply Chain Brain says the growing complexity of global supply chains is contributing to a recent increase in product recalls, which have impacted everything from food to electric vehicles and software. Product recalls are often expensive on their own, but they may also lead to even more expensive product liability lawsuits.
• ESG and DEI Culture Wars. In recent years, many companies have adopted ESG and DEI policies. Now, many companies appear to be abandoning these policies amid political backlash. ESG Dive says Meta cut its DEI team, Microsoft cut several diversity roles, and Amazon said it would be halting some DEI programs. As companies navigate the culture wars, they face litigation risks from both sides. Reuters says the U.S. Supreme Court may issue a ruling that makes it easier for people from majority backgrounds to pursue reverse discrimination claims.
• AI Risks. The recent explosion of AI tools is also leading to new risks. In addition to risks associated with data privacy, AI-fueled discrimination, misinformation caused by AI hallucinations, and unintentional copyright infringement stemming from AI-generated content that has been trained on copyrighted material, companies are facing scrutiny over claims related to AI usage. Reuters says “AI washing” is becoming a new buzzword in class action litigation.

Could a Lawsuit Against Your Company Go Nuclear?

With litigation costs increasing, all businesses must be hyper-vigilant about the risks of a nuclear verdict. While strong risk management can help prevent claims and the potential for nuclear verdicts, it’s also important to ensure that your primary and excess liability policies’ coverage limits are adequate. Heffernan Insurance Brokers can help you review your coverage needs. Learn more.

Is your business dedicated to sustainable practices? Green policies may help you achieve your goals. Although insurance for environmentally-friendly practices is often overlooked, there are coverage options that support sustainability.

Why Should Businesses Go Green?

If your business is already committed to sustainable business practices, you’re probably aware of the many benefits of going green. Let’s take a look at a quick summary of the benefits.

First of all, sustainable practices make business sense. Sustainable practices often result in reduced waste and energy usage, which leads to major cost savings. As an example of what’s possible, the Center for Sustainable Energy says a Walmart Supercenter in Covina, California, reduced its electricity use by 32% through a retrofitting project.

In addition to the direct benefits and cost savings gained from reducing energy consumption and waste, businesses often improve their reputation and appeal to consumers by adopting green practices. According to PwC, 80% of consumers say they are willing to pay more for sustainable products. On average, consumers will pay 9.7% more for goods that are locally sourced, made from recycled or eco-friendly materials, produced in a supply chain with a low carbon footprint, or meet other environmental criteria.

On top of these purely business reasons, there are ethical reasons to embrace green practices. According to the National Oceanic and Atmospheric Administration (NOAA), we are already feeling the impacts of human-induced climate change. The climate changing is resulting in higher temperatures, rising sea levels, increased drought, and more flooding. Everyone in society – including business leaders and investors – have a stake in the climate.

How Do Green Policies Work?

Green insurance policies are not a specific type of insurance product. Rather, the term applies to any insurance policy that includes terms that support sustainability. These terms often take the form of green discounts or endorsements.

Green Discounts

Some insurance companies provide insurance discounts as green incentives. For example, the Insurance Information Institute says some insurance companies offer hybrid vehicle premium discounts and alternative fuel premium discounts, while some homeowners insurance companies offer premium discounts for Leadership in Energy and Environmental Design (LEED)-certified homes.

These insurance discounts are common in personal insurance policies. In addition, some commercial insurance providers offer insurance premium incentives for sustainable practices. Ask your broker or insurance carrier about your options.

Green Endorsements

If you need to repair a building after a loss or replace a piece of equipment, insurance that provides replacement cost value coverage will typically only cover the cost necessary to repair or replace the lost property with materials of similar quality. This is superior to insurance that covers actual cash value, as this only pays a benefit for the current value. Depreciation means this is often not enough to cover the full cost to replace the lost property.

Even replacement cost value coverage has its limitations, though. As technology progresses and new building codes come into effect, the materials and equipment you used in the past may no longer be adequate. Ordinance or law endorsements address this issue insofar as building codes are concerned, by providing coverage to bring a building up to modern codes when repairs are necessary. Similar endorsements provide coverage to help businesses adopt greener options when repairs are necessary.

According to the Insurance Information Institute, businesses can add a green endorsement for materials and equipment to a commercial property insurance policy. This will provide coverage for the higher cost of environmentally-certified materials and equipment even when the original property or equipment was not green certified. Green endorsements for construction and related costs cover the higher costs associated with green design and engineering, recycling, and certification fees.

Imagine a storm destroys your building’s roof. You want to replace it with a sustainable option that has a smaller carbon footprint and will conserve energy. However, your old roof was not sustainable, and your insurance does not cover the upgrade. Now, you have to choose between a non-sustainable roof that is not in line with your company’s values or covering the costs out of pocket. A green endorsement prevents dilemmas like this.

Are You Interested in Green Policies?

Some green insurance policies may already be available to your business. Plus, new green policy options may emerge as insurers look for new ways to incentivize sustainable practices. To explore your options, reach out to Heffernan Insurance Brokers.

Several social and legislative issues have complicated the insurance landscape for foster care agencies and other human service organizations that work with children and vulnerable populations. As insurance carriers take steps to avoid risks – and sometimes pull out of entire markets – obtaining adequate professional liability coverage is becoming more difficult and more expensive.

The Foster Agency Crisis

New legislation is at the heart of many of the current issues facing the human services sector.

California AB 2496 (also called the Foster Family Agency Accountability Act) was signed into law on September 22, 2024. According to the NIAC, the bill was supposed to help the state avoid a shutdown of foster care agencies by ensuring these agencies would not be liable for unforeseeable harms, among other provisions. However, the revised version that was signed into law did not do enough to shield foster agencies from litigation.

A recent lawsuit shows how expensive litigation can be. According to The Press Democrat, a jury awarded nearly $25 million to three foster children who were sexually abused. The jury found that the foster agency was responsible for more than half of the $25 million verdict for failing to vet the foster parent properly or perform sufficient inspections. The foster agency denies negligence, arguing that the man had fostered children with his wife in the past and had no known history of abuse.

Statute of Limitations Reform

Human services organizations also face increased exposure to expensive lawsuits due to recent changes in the statutes of limitations for sexual abuse against children.

Many states have increased or paused the statutes of limitations in such cases. According to Child USA, new laws or resolutions went into effect in 11 states and one territory in 2024. As of 2024, 19 states and two territories have no civil statute of limitations and 30 states and three territories have revived statutes of limitations that had expired.

On the federal level, the Eliminating Limits to Justice for Child Sex Abuse Victims Act of 2022 eliminated the statute of limitations for civil lawsuits brought by people who suffered sexual abuse as children in violation of certain federal laws.

Other Factors Impacting Insurance Coverage

In addition to recent legislative challenges, human services organizations face increased pressure due to evolving social awareness and demand for services.

Recent years have seen several prominent social movements, including #MeToo and DEI. While these movements have aimed to bring justice, equity, and accountability to those who need it, they have also brought increased scrutiny and litigation exposures.

At the same time, the human services sector has experienced an increased demand for services. The 2024 Annual Homelessness Assessment Report from the U.S. Department of Housing and Urban Development shows that homelessness reached record levels in 2024. Among families with children, there was a 39% increase in homelessness in 2023.

The California Market

While human service organizations throughout the nation face a difficult insurance market, the situation in California is particularly dire.

In 2024, the Nonprofits Insurance Alliance of California announced that it would no longer provide coverage for foster care agencies in the state, citing cost-prohibitive litigation. According to the North Bay Business Journal, the insurer covered 90% of the foster care agencies operating in California.

The Nonprofits Insurance Alliance of California (NIAC) says it had dominated the market because most other insurers had already exited or were in the process of exiting. Now that NIAC is also exiting the market, many agencies could be left without coverage.

What Can Human Services Organizations Do?

Human services organizations should be prepared for a challenging renewal, especially if they have molestation exposures. Experiencing nothing more than a rate increase may be the best-case scenario for this sector. Many organizations may have a harder time finding any coverage due to decreased market capacity.

However, it’s not time to throw in the towel. There are a couple things organizations can do:

• Work with Heffernan Insurance Brokers – a committed partner who is familiar with the human services organization and has access to a wide range of insurance solutions designed for this sector.
• Consider creative insurance strategies. For example, if you can’t secure the coverage you need in the traditional insurance market, collaborate with your broker to explore other options such as non-admitted coverage or captive programs.

Heffernan Insurance Brokers has coverage solutions designed for nonprofit organizations, including those in the human services sector. We’ll help you find the coverage you need, including professional liability and sexual abuse and molestation coverage. Learn more.

Family offices and financial institutions have complex insurance needs. To manage their risks, it’s necessary to have multiple insurance policies, and policies are often purchased as special needs arise.

However, a reactive insurance approach can lead to challenges when many insurance policies and high-value assets are involved. For example, you may have policies that provide overlapping coverage, resulting in financial waste. Conversely, your firm may be exposed to dangerous coverage gaps. A proactive approach to insurance can help you secure the coverage you need without suffering from gaps or overlaps.

To see whether there’s room for improvement in your family office or financial institution insurance strategy, ask the following four questions.

1. Can You Consolidate Your Coverage?

Working with as few carriers as possible can simplify insurance. Not only will you have less paperwork and fewer contacts to deal with, consolidating coverage can also help you secure lower premiums while avoiding coverage overlaps. For example, instead of securing various policies separately, you may be able to purchase a commercial package policy that includes general liability, employment practices liability, crime insurance and more – all at a lower rate than what you would pay by purchasing policies separately.

For family offices, insurance consolidation can also be a smart strategy for the family served. A good example of this is when you buy property insurance for a primary home and a vacation home. You may receive a better rate if you purchase coverage for both properties from the same insurance carrier. It may also be possible to extend some of the coverage (such as the liability coverage) from the primary residence’s policy to the vacation home.

Furthermore, if you need to file a claim, the process will be easier because you’ll know who to contact. For example, imagine you fall victim to a wire transfer scheme and are unsure whether you should make a claim under your crime insurance policy or your cyber insurance policy. If both policies are with the same carrier, there’s only one insurer to contact.

In some cases, it may make sense to use multiple carriers based on the rates and terms they offer. In many cases, though, a consolidated approach can streamline coverage.

2. Do You Have Coverage for Emerging Risks?

Twenty years ago, few people were thinking about cyber insurance. Now, many risk managers consider it a necessity. When reviewing your coverage, don’t simply focus on the insurance types that have served you well in the past – also consider what coverage you might need going forward. Consider the following:

• Loss Drivers: How crime, natural disasters, and other loss drivers are changing and how this impacts your insurance needs.
• Social Movements: How social trends, such as the rise of DEI and ESG, could impact your risk management and coverage needs.
• Litigation Trends: How legal trends, such as nuclear verdicts and social inflation, could lead to greater coverage needs.

3. Have the Terms of Your Insurance Policies Changed?

Most insurance policies renew every year, at which point the insurance carrier may change the terms of coverage. It’s important to review these changes to ensure your coverage still fits your needs.

• Has the premium increased? Premium increases are often the most obvious change. A modest rate hike may simply reflect rate trends across the insurance market. However, if the rate hike is substantial, you may like to search for a better value elsewhere.
• Are there new exclusions? Insurers may introduce new exclusions to reduce their exposure to rising losses. For example, Bloomberg Law says insurers have been adding biometric liability exclusions in response to class action lawsuits alleging biometric privacy violations, whereas The Washington Post says some insurance companies are excluding certain natural disaster protections.
• Have the limits changed? Instead of excluding certain losses, insurers may change your limits. Review your insurance policies for changes in limits and sub-limits. Also, be sure that limits continue to be adequate – particularly with recent increases in property values and replacement costs.

4. Are You Working with a Specialized Broker?

Family offices, private equity firms, foundations and financial institutions face unique challenges, as do the affluent clients they serve. A broker who specializes in coverage for financial institutions, family offices and high-net-worth individuals can provide insights into the less common coverage types that you might need. They can also help you access carriers that provide high-limit policies.

The Private Client Group at Heffernan Insurance Brokers can conduct a risk analysis and make coverage recommendations based on your unique exposures. We also provide access to the insurance products you need to manage your risks efficiently. Learn more.

It’s no secret that reconstruction costs have increased significantly in recent years. However, a recent report shows just how far costs have surged for both commercial and residential reconstruction, and the sheer scope of the issue may come as a surprise. This is a good time to review your insurance coverage and make sure it’s sufficient for today’s costs.

A 60% Increase

Supply chain issues, higher labor costs and more expensive building materials have caused reconstruction costs to surge.

Verisk says that both residential and commercial reconstruction costs increased by around 60% over a 10-year period. Residential reconstruction costs surged by 63.7% between October 2014 and October 2024, while commercial reconstruction costs surged by 58.4% during this period.

This increase outpaces general inflation. According to the CPI Inflation Calculator provided by the U.S. Bureau of Labor Statics, $1 in October 2014 has the equivalent buying power of $1.33 in October 2024, indicating a cumulative inflation rate of approximately 33%. If reconstruction costs had increased at the same rate, a project that would cost $500,000 in 2014 would cost $664,743.32 today – but reconstruction costs have increased much more than this. Based on a 60% increase, a reconstruction project that would cost $500,000 in 2014 would cost around $800,000 today.

It’s not just total losses that are more expensive. Imagine if a storm damages a roof. In 2014 prices, the repairs for this particular roof would cost $10,000. In 2024 prices, the same repairs could cost around $16,000. Many types of claims have been impacted by similar increases. All of these increases add up, and it’s been taking a toll on the insurance industry.

The Impact on Insurance

Insurance companies have been grappling with higher claims costs. There are many factors at play, including natural disasters. However, increased construction costs are certainly part of the challenge. AM Best says the U.S. property and casualty insurance sector experienced a net underwriting loss of approximately $2.6 billion in 2024 – and that’s an improvement over 2023.

For policyholders, rising claims costs have resulted in rising insurance premiums. Although policyholders may not like this, insurers have needed to raise prices to keep up with increasingly expensive claims.

Limits Aren’t Always Keeping Up

Unfortunately, as property values and reconstruction costs rise, many policyholders are not keeping up. According to Fortune, researchers from the University of Colorado at Boulder and the University of Wisconsin-Madison analyzed 5,000 policies and found that 74% were underinsured and 36% were severely underinsured.

Underinsurance can be compounded if your policy includes a co-insurance clause that penalizes policyholders for failing to maintain adequate coverage. For example, if a co-insurance clause requires you to maintain limits that are at least 80% of your property’s value, your claims payouts could be reduced if your property is insured for 79% or less of its value – even if the total claim is lower than your limit. The co-insurance penalty can be a shocking surprise for property owners who don’t realize that they are underinsured.

What Can Policyholders Do?

Rising reconstruction costs are a challenge for both insurers and policyholders. However, there are three important steps you can take.

• Assess your insurance limits. If you haven’t raised your limits in a while, you may be underinsured. Consider whether you need to raise your limits and be mindful of any co-insurance clauses that might apply a penalty for being underinsured.
• Check whether you have guaranteed replacement cost coverage. Insurance claims payouts can be calculated in different ways depending on the policy terms. A policy that provides actual cash value will take depreciation into account when calculating claims payments. As a result, the claims payment may not be large enough to cover replacement or reconstruction. A policy that provides replacement cost coverage will calculate the payout based on the cost to repair or replace the property, up to the policy level. A policy with guaranteed replacement cost value will pay the full price to repair or replace the property even if it exceeds the policy limit. This is important since construction costs can increase mid-year, especially after a widespread natural disaster. However, the policyholder will still need to maintain adequate coverage.
• Make informed decisions. Ask your agent to explain the limits and terms they’re quoting. If an agent offers you a surprisingly low property insurance quote, verify that you would have the coverage you need if you had to rebuild.

Do you have sufficient property insurance coverage in light of rising reconstruction costs? Heffernan Insurance Brokers can help you review your current coverage and determine whether more coverage is needed. Contact us.

Employee benefits are transforming, and employers can get ahead of these changes as they strive to attract and retain top talent. The modern workforce is multigenerational, with evolving expectations around work-life balance, mental health and personalized benefits. In this dynamic environment, understanding and implementing the latest trends in employee benefits can set an organization apart as an employer of choice.

This article explores five key trends that will shape employee benefits in 2025.

1.  New Administration’s Benefits Changes

Following the 2024 election and the return of the Trump administration to the White House, employers are keeping their eyes out for imminent changes to the health care system. It remains to be seen whether Trump and the Republicans will renew the Affordable Care Act subsidies passed through the Inflation Reduction Act. Nonrenewal of these subsidies, set to expire at the end of 2025, could lead to premium increases and decreased enrollment. Potential changes could also occur to Medicare and Medicaid, which could influence employer decisions regarding retiree health benefits and supplemental coverage options for those enrolled.

Furthermore, employers will have to wait and see how Trump’s platform will impact reproductive health and family policies (e.g., paid leave, child care and the child tax credit) for their employees. The latest election results could bring significant changes to employee benefits for the next four years and beyond.

2.  Health Plan Design Modifications

Several industry surveys and reports reveal that employers anticipate health care costs to grow between 7% and 8% in 2025. Provider shortages, rising drug costs, chronic health conditions and aging populations continue to drive health care costs. In addition, glucagon-like peptide-1 (GLP-1) drugs and advanced treatment options, such as cell and gene therapies and biologics, are becoming more popular, even though they come with a high price tag.

This year, employers may struggle to mitigate skyrocketing health care costs while keeping benefits affordable for employees. As a result, many employers will plan and implement multiple cost-saving strategies to mitigate rising health care costs. One such popular strategy is modifying health plan designs. A Mercer survey revealed that half of employers (53%) will make cost- cutting changes to their plans in 2025, up from 44% in 2024. These changes generally involve raising deductibles and revisiting other cost-sharing arrangements. These changes often result in higher out-of-pocket costs for employees seeking care.

Employers were hesitant to pass on cost increases in previous years due to attraction and retention concerns. While cost sharing is not the first option, more employers this year may raise deductibles, premiums and copays to offset costs. While many employers have held off on making plan-related changes, they’re finding it more difficult, as health care costs have remained high for the last few years.

Employers may also maintain full coverage of recommended prevention and screening services or incentivize employees to seek cost-effective care options. Efforts to increase employee health care literacy can also help individuals make educated and cost-effective care choices.

3.  Supportive Family-building Benefits

Reproductive health care benefits remain a key issue for employers as they strive to meet employee needs and remain competitive. A ResumeBuilder.com survey revealed that 1 in 5 American workers are unlikely to consider a job offer in a state with a highly restrictive abortion policy. Also, 3 in 10 employees are unlikely to work in a state that passes legislation banning in vitro fertilization (IVF), and 14% of workers are likely to leave to work elsewhere if legislation effectively banning IVF is passed in the state where they work. While employers can’t necessarily control which state they’re located in, it’s important to understand employee sentiment and consider benefits and support that meet employee needs.

Additionally, more employers are offering family-building benefits because they have proven highly valued among employees looking to start or build their families. This year, many employers are expanding benefits offerings to include the following:

Paid parental and adoption leave  Child care subsidies

Flexible scheduling  Surrogacy benefits

Family planning assistance  High-risk pregnancy care

Pregnancy, lactation, postpartum and menopause support  Testosterone deficiency treatments

Employers providing legal reproductive care benefits should assess the implications of these offerings as reproductive health care laws continue to evolve.

4.  Growing Popularity of GLP-1s

Americans’ heightened interest in and spending on GLP-1 drugs is a major driver of rising health care costs. While GLP-1 drugs were traditionally used to treat diabetes, they are now in demand for weight loss.

These drugs are available in various doses and strengths and are meant to be used as a long-term treatment for their approved uses. GLP-1 treatment costs an average of around $1,000 per individual each month and should be taken continuously. When considering covering weight loss drugs, many employers are concerned that they require a long-term commitment to be effective.

GLP-1 use is already widespread but is expected to increase in popularity. KFF reports that around 1 in 8 Americans have already used a GLP-1 drug, while 6% are currently taking one. However, this number is projected to rise in the coming years. Investment bank J.P. Morgan estimates that 9% of the U.S. population could be on GLP-1s by 2030.

This trend impacts workplaces as employees ask their employers to cover weight loss drugs. Given the priciness of GLP-1 drugs and their long-term commitment, employers may still be on the fence about whether they should cover the drugs despite demand.

5.  The Rise of Biosimilars

Specialty drugs, including biological drugs, are one the fastest-growing categories of pharmacy spending. Biologics are medications that come from living organisms, such as sugars, proteins and DNA. Biologics treat a range of conditions, such as cancer, psoriasis, rheumatoid arthritis and inflammatory bowel diseases. Even though these drugs are effective at treating complex health conditions, they are expensive. According to a report published in the medical journal JAMA, biologics make up only 2% of prescriptions but account for 37% of net drug spending. What’s more, biosimilars have the ability to be a deflationary force in an otherwise rising-cost health care industry.

Biosimilars are an emerging category of biologic medications. These treatments are similar to a reference drug, which is an existing biologic that was previously approved by the U.S. Food and Drug Administration (FDA). For a biosimilar to be approved, there must be no meaningful differences in safety and effectiveness from the original biologic. Compared with original biologics, biosimilars are lower-cost drugs that allow for greater access to more patients. New biosimilars are gaining FDA approval and entering the market each year. As of December 2024, 64 of these medications are currently approved and have been frequently entering the market since the first biosimilar was approved in 2015.

In the past decade, $36 billion of biosimilar spending has saved $56 billion on original biologics. These savings could total over

$180 billion in the next five years. However, efforts to integrate biosimilars into the drug market have faced challenges with reaching widespread adoption, such as drug exclusivity rights, active patents, approval processes and success rates for developing biosimilars.

Looking forward, the total biologics industry is projected to expand. Industry projections show that the market size is expected to grow from a current spend of around $450 billion to almost $850 billion over the next decade.

Summary

As the workforce’s needs continue to evolve, so must the benefits that companies offer to remain relevant and meaningful to employees. Every workplace is different, but employers can strive to monitor and understand the latest benefits trends to better attract and retain workers.

Contact us today for more benefits resources.

When you create a budget for your personal finances, you probably set aside some money for future expenses such as paying for a vacation. In many cases, you don’t know the exact cost of the future expense, so you have to take an educated guess for budgeting purposes.

Insurance claims adjusters go through a similar process.

When a claim is reported, the claims adjuster establishes an expected budget for the claim, and that budget is known as a claim reserve. The reserve is an estimate because the insurer won’t know the exact amount that will be incurred until the claim is closed.

In some cases, the reserve will be fairly predictable, like the cost to repair a totaled vehicle. In other cases, the estimated cost may be far less certain, like when a worker suffers a back injury.

Claim conditions can evolve rapidly, so claims adjusters should adjust the claim reserve each time they review the claim – often bi-weekly.

Below is a simplified example of the reserving process for a work comp claim involving a back strain:

• Day 1: Based on initial reports, the adjuster sets a reserve for $3,500. This budget should cover three doctor visits, physical therapy, imaging and two weeks of lost time from work with no permanent disability.
• Day 14: Based on interim reports, the adjuster increases the claim reserve to $19,000. Now, it appears that the injured worker will be off work for at least three months. Additional treatment and an MRI are needed. An independent medical exam may also be required.
• Day 42: The injured worker recovered more quickly than expected and has returned to work with no limitations. Only $6,800 of the $19,000 reserve was used. The claim is closed with a total incurred of $6,800.

How Do Reserves Impact Premiums?

When you apply for insurance, or your account is renewed, the underwriter reviews your company’s loss runs, which typically include the past three years of open and closed claims. While the final figure isn’t yet known for open claims, reserves provide the underwriters with a good estimate of what will be paid. These numbers help determine if the carrier offers you coverage, and how much they will charge.

If the open claim reserves are accurate when your loss runs are reviewed by the underwriter, you should receive a quote that reflects your true loss experience.

But what happens if the open claim reserves are not accurate? Imagine these scenarios:

1. The claim was resolved with a much lower amount incurred than what was reserved, but the claims adjuster forgot to close the case in the system so it is still listed as an open claim with a high reserve on your loss runs.
2. The claim looked serious at first, prompting a high reserve – but then the situation improved and the needed reserve was less. However, the claims adjuster forgot to reduce the reserve in the system, so the high reserve still shows on your loss runs.

In both these scenarios, your quote could be inflated due to inaccurate open reserve information on your loss runs!

How Can You Keep Your Costs Down?

The best way to keep your costs down is to manage your risks. If your claims history shows a high frequency or high severity of claims, underwriters may determine that the chance of future claims is also high, and they will charge higher premiums.

Both closed and open claims can have an impact on your premiums, so it’s important to review your loss runs regularly and to be aware of your open claim reserves.

The Heffernan Claims Advocacy Team can perform a quarterly analysis including reserve review, collaborate with your claims adjusters, and keep you apprised of any notable developments to help you avoid surprises at your coming policy renewal.

If you’d like assistance in these areas, ask your Heffernan Insurance Broker to introduce you to the claims team.

Personal lines insurance can be a crucial aspect of financial planning that offers individuals and families financial protection against various risks. Personal insurance refers to a range of policies aimed at safeguarding individuals and their families from financial setbacks caused by unforeseen events. This type of insurance encompasses policies such as auto, home, renters and life insurance, each designed to insulate individuals and families from financial losses.

By understanding the different types of personal lines insurance and their advantages, individuals can make well-informed choices to shield themselves and their families from unforeseen financial challenges. Consider the following risk exposures and how insurance can help.

Property Damage

One common risk for individuals is property damage, which is the damage or destruction of physical items you own, such as the structure of your home or individual items. Homeowners insurance can offer protection for your home and its contents. It typically includes dwelling coverage (for house damage) and personal property coverage (for belongings). Property insurance is an essential financial shield for property owners, offering financial coverage for various risks such as fire, severe weather and vandalism. Most mortgage lenders mandate insurance, ensuring additional protection for the owner’s investment. Property insurance offers peace of mind, assuring owners that their assets are safeguarded from unexpected incidents.

It’s important to note that property insurance doesn’t cover every situation. Natural disasters such as hurricanes, floods and earthquakes generally require separate insurance beyond a typical homeowners policy. In addition to standard coverage, property owners may need to invest in endorsements, such as sewer backup, flood, sinkhole and earthquake insurance, to address gaps in coverage.

Property Theft

Another common risk for individuals is property theft. Homeowners and renters insurance typically include coverage for property theft, even if the theft doesn’t occur at your home; however, coverage limits may vary depending on the policy and situation. Additional coverage, such as a scheduled personal property endorsement or a rider to your home or renters insurance policy, may allow you to list each valuable item individually, along with its appraised value, ensuring it is fully protected against loss, theft or damage.

Start by getting a professional appraisal for each item to determine its worth. Then, provide this documentation to your insurance provider, who will adjust your policy accordingly. This process can help ensure that your high-value possessions are adequately covered beyond the standard policy limits. Review and update your coverage regularly to reflect any changes in the value of your items.

Vehicle Damage and Theft

Even the most careful driver is at risk for vehicle damage and theft. Many people opt to carry only as much auto insurance as is required by law, which is typically just liability coverage, but this won’t cover damage and theft. For that, you will need a more well-rounded policy that includes the following:

Comprehensive coverage can help pay for losses caused by noncollision events, such as weather events, theft, vandalism or striking an animal.

Collision coverage may help cover the cost of repairing your vehicle if it is damaged in an accident with another vehicle or object.

Uninsured/underinsured motorist coverage can help you stay financially protected if your vehicle is involved in a hit- and-run incident or if you get in a car accident with an at-fault uninsured/underinsured third party.

Personal Liability

Personal liability insurance is crucial for protecting yourself financially from potential lawsuits and claims. If you have attractive nuisances on your property, such as a swimming pool or trampoline, you could be held liable if someone gets injured while using them. Dog bites are another common source of liability claims, as you could be responsible for medical expenses and legal fees if your pet injures someone. Hosting house parties also increases your risk, as guests could get injured or cause damage, leading to potential lawsuits. Adding personal umbrella insurance provides an extra layer of protection, extending your coverage limits and offering peace of mind in case of significant claims that exceed your standard policy limits. This comprehensive approach can help protect you against various risks and liabilities.

Legacy Planning

Legacy planning with life insurance can be vital in helping provide for your loved ones after you’re gone. Life insurance can help cover funeral expenses, pay off debts and provide a financial cushion for your family, allowing them to maintain their standard of living. It’s never too early to get life insurance, as securing a policy when you’re young and healthy often means lower premiums and better coverage options. Additionally, early planning allows you to build a more substantial policy over time, which can better protect your legacy. By taking proactive steps now, you can provide peace of mind and financial stability for your loved ones in the future.

Contact Us

We’re here to help you learn more about addressing insurance exposures through proper coverage. Contact us for more information.