Stronger Building Codes – A Non-Negotiable Step for Small and Mid-Market Business Resilience

By: Mark Berven | March 5, 2025

Mark Berven is President and Chief Operating Officer of Nationwide Property & Casualty, overseeing personal lines, commercial lines, excess and surplus, agribusiness and specialty insurance. With a career at Nationwide spanning over three decades, Berven has held executive roles focused on property casualty insurance, corporate strategy, and product and risk management. He earned his degree from the University of Northern Colorado and holds Chartered Property Casualty Underwriter and Associate in Claims designations.

Topics: Property

Resilience is one of the cornerstones of a healthy insurance market for consumers. Nationwide has been
advocating for communities to adopt modern building codes and encourage properties to be built to
FORTIFIED standards developed by the Insurance Institute for Business and Home Safety (IBHS).

Strong, enforceable building codes are the most effective way to protect property, reduce damage, save
lives and lessen the need for post-catastrophe federal aid.

Severe weather events are no longer rare; they’ve become the new normal, leaving businesses and
communities vulnerable. In 2024 alone, hurricanes and extreme weather events caused billions in
damages, disrupting lives and businesses alike. While much attention is paid to the impact these
extreme weather events have on homeowners and renters in those communities, business owners are
also victims to Mother Nature’s fury.

Severe weather events have a profound impact on businesses, often resulting in significant financial
losses and long-term disruptions.

Severe Weather Impacts on Businesses

According to McKinsey and Company, nearly 60% of small businesses in Florida were affected by
Hurricane Milton, which swept across the state in October 2024. These businesses, collectively
generating over half a trillion dollars in revenue, faced substantial challenges in recovering from the
storm’s devastation. Additionally, the U.S. Census Bureau's Business Trends and Outlook Survey revealed that 31.3% of businesses in Tennessee experienced monetary losses due to extreme weather in
early 2024.

On average, some studies show that the recovery costs for small businesses can range from $3,000 to
$25,000 or more, depending on the severity of the damage and the specific circumstances. These costs
include property damage, lost revenue due to downtime, and expenses related to rebuilding and
restoring operations.

Unfortunately, many businesses never fully recover from such events; the Small Business Credit Survey
found that 1 in 10 small employer businesses suffered losses from natural disasters, with some unable
to reopen their doors.

These statistics highlight the critical need for robust disaster preparedness and resilient building
practices to mitigate the financial impact of severe weather on businesses.

High Agreement on Importance

Fortunately, many business owners understand the importance of modernizing current building code
standards. According to a recent Nationwide survey, 79% of small business owners (SBOs) and 73% ofmid-market business owners (MMBOs) emphasize the significance of these standards for risk mitigation.
Furthermore, 81% of SBOs and 74% of MMBOs agree that building code compliance is vital for
mitigating severe weather damage.

That’s why it’s concerning that, according to FEMA, 65% of U.S. counties, cities and towns are not
adhering to modern building codes to help protect structures from severe weather.

In today’s market, customers and partners increasingly value businesses that demonstrate a
commitment to sustainability and resilience. By investing in advanced building standards and
technologies, business owners can showcase their forward-thinking and responsible approach. This not
only enhances their reputation but also builds confidence among customers and stakeholders, fostering
stronger business relationships and loyalty.

Willingness to Invest

There is a notable willingness among business owners to invest in building code compliance. Data shows
that 77% of SBOs and 57% of MMBOs are prepared to spend more to ensure their properties meet the
required standards. Additionally, 90% of construction leaders have expressed their readiness to invest in
ensuring buildings are up to code. This willingness to invest underscores the recognition of the long-
term benefits of building code compliance.

Addressing Barriers

Despite the clear benefits, there are barriers that business owners face in upgrading their properties.
Construction costs are the top obstacle for SBOs, with 48% citing it as a major concern. For MMBOs,
business disruption is a primary challenge, also noted by 48% of respondents.

While the initial costs of building to higher standards may seem daunting, the long-term financial
benefits are substantial. Investing in resilient structures can lead to significant savings on insurance
premiums, disaster recovery expenses, and energy efficiency. The upfront costs are outweighed by the
potential savings, making it a financially sound decision for business owners. Insurance agents should
emphasize these long-term cost benefits when discussing building code compliance with their clients.
Businesses need stronger building codes now

As we’ve seen during the past few years, severe weather causing widespread damage has become the
rule rather than the exception. It’s critical that carriers, consumers, business owners, regulators and
policymakers take appropriate steps to ensure that current and new properties are built to withstand
these powerful events.

New Jersey Workers’ Compensation Medical Cost Trends in 2024. How to Improve the Trend

Tips for managing costs and outcomes in a state where expenses can track above the national average.

By: Horizon Casualty Services, Inc. | April 1, 2025

In 2024, New Jersey’s workers’ compensation system has been influenced by several key medical trends, including rising medical costs, legislative changes, and evolving treatment protocols. Understanding these developments is crucial for stakeholders navigating the state’s workers’ compensation landscape. Below are just some of the key trends to follow:

Rising Medical Costs

HCS identifies providers with WC and PIP experience and contracts with the services most needed by the injured individual. HCS is contracted with nearly all hospitals and all level 1 and level 2 trauma centers in the State of New Jersey. We identify initial treaters, specialists, physical therapy centers, ambulatory surgical centers, urgent care providers, diagnostic centers and more. Using a proprietary formula, the best providers are highlighted so that clients can rest assured their injured claimants are in the right hands.

Rising medical costs are significantly impacting workers’ compensation systems, with New Jersey (NJ) experiencing notable challenges. Key factors contributing to this trend include:

Absence of a Medical Fee Schedule: Unlike many states, NJ lacks a standardized medical fee schedule for workers’ compensation. Instead, it relies on a “usual and customary” charge system, leading to higher medical expenses. This absence has resulted in NJ having some of the highest workers’ compensation premiums nationwide.
Medical Inflation: Nationally, medical care costs have outpaced general inflation. This trend is driven by increased consumption of medical services, labor shortages, and higher wages for healthcare workers, all of which elevate the costs of services covered by workers’ compensation.
Surgical Costs: NJ reports some of the highest surgical costs in the U.S., averaging 115% more than other states. This is attributed to the lack of fee schedules and the prevalence of out-of-network providers receiving higher payments for services.
Medical Claim Petitions: The practice of medical providers accepting payments and subsequently filing petitions for additional compensation has led to increased payouts and administrative burdens, further driving up costs.

These factors collectively contribute to the rising medical costs in NJ’s workers’ compensation system, posing challenges for employers, insurers, and policymakers in managing and mitigating these expenses.

Legislative Changes

Recent legislative changes in NJ have increased workers’ compensation costs for employers/insurers.

In August of 2024, legislation was enacted to raise the attorney fee cap in workers’ compensation cases from 20% to 25%. This adjustment acknowledges the increased workload of workers’ compensation attorneys since the cap’s establishment in 1927.

NJ’s Division of Workers’ Compensation typically requires employers/insurers to cover 60% of the injured workers’ attorney fees, with the employee responsible for the remaining 40%. With the new 25% cap, employers/insurers costs have risen.

Also, in response to escalating medical costs, NJ has implemented legislative measures aimed at regulating expenses within the workers’ compensation system.

Notably, the state increased the maximum allowable fee for evaluating physicians from $600 to $1,000. This adjustment seeks to ensure that medical experts are fairly compensated for their evaluations, potentially improving the quality of medical assessments in workers’ compensation cases.

Evolving Treatment Protocols

Dave Cucinotta, Director of Finance Strategy and Administration, Horizon Casualty Services, Inc.

The integration of advanced medical treatments and technologies has also influenced workers’ compensation medical trends in the Garden State.

“While these innovations can enhance patient outcomes, they often come with higher costs. The challenge lies in balancing the adoption of these advanced treatments with the need to manage expenses effectively,” said Dave Cucinotta, Director of Finance Strategy and Administration for Horizon Casualty Services, Inc.

The increasing prevalence of workplace-related mental injuries has prompted discussions about compensability and appropriate treatment protocols. Addressing mental health issues requires comprehensive approaches, including counseling and therapy, which can contribute to higher overall medical costs.

Comparative Analysis with Other States

When compared to other states, NJ’s workers’ compensation medical costs are higher than average. Studies by the Workers Compensation Research Institute (WCRI) indicate that medical payments per claim in NJ are notably higher, than in other states.

This comparison highlights the need for continued evaluation of cost-containment strategies to align NJ’s expenses with national benchmarks.

Impact on Stakeholders

The rising medical costs within NJ’s workers’ compensation system have significant implications for various stakeholders:

Employers: Increased medical expenses will lead to higher insurance premiums, affecting business operating costs.
Employees: While access to advanced medical treatment is beneficial, there is a concern that escalating costs could influence the approval and provision of necessary care.
Insurers: Insurance carriers may face challenges in underwriting policies and managing claims effectively considering rising medical costs.

Future Considerations

To address these challenges, stakeholders might consider the following strategies:

Promoting Preventive Care: Encouraging workplace safety and preventive health measures can reduce the incidence of injuries, thereby decreasing overall medical expenses.
Enhancing Loss Control Services: Evaluating workplaces with the intention of preventing injuries before they happen is worth the investment.
Enhancing Case Management: Improving coordination of care and case management can ensure that injured workers receive appropriate and timely treatment, potentially reducing prolonged medical costs.

How to Improve the Trend

With NJ’s workers’ compensation facing significant challenges due to rising medical costs, legislative changes, and evolving treatment protocols, there is a need for improvement.

Addressing these issues requires a collaborative approach among policymakers, employers, insurers, and healthcare providers to ensure that the system remains sustainable and continues to serve the needs of injured workers effectively.

“The most significant way to improve medical cost trends in NJ workers’ compensation is to evaluate who is pricing the claims,” said Cucinotta.

Horizon Casualty Services, Inc. (HCS) has been providing PPO network services to NJ clients since 1994

HCS plays a pivotal role in improving medical cost trends through its extensive provider network and innovative, data-driven strategies to achieve superior medical outcomes at the lowest cost. Through its Outcomes Focused Network Strategy, HCS ensures that injured workers receive care from top-tier providers who prioritize quality, adhere to evidence-based practices, and take a conservative approach to costly interventions like surgery and prescriptions. By contracting with a broad network of premier providers and securing highly competitive rates, HCS significantly reduces costs while maintaining exceptional care standards. Additionally, through proactive dispute management, precise data integrity, and an extensive network, HCS ensures a seamless, efficient process that significantly reduces administrative costs.

Cucinotta adds that, “These innovative approaches positions HCS as a leader in controlling medical costs and driving positive results in the NJ workers’ compensation landscape.”

For More Information

For more information, email Jed Hoban, HCS Business Development Executive, at Jed_Hoban@HorizonBlue.com or visit https://www.horizonblue.com/horizoncasualty/.

About Horizon Casualty Services, Inc.

HCS, in business since 1994, is a leading PPO in New Jersey WC and PIP. HCS has a 100% direct-contracted provider network that includes almost all New Jersey acute care hospitals. The network delivers significant overall savings and, with its deep focus on precision, an extremely low appeals rate. Its PPO results, combined with its Healthcare Value Strategy and Outcomes Focused Network, enable insurers to be the best at delivering quality medical care to claimants at the right cost — clearly a win-win for all. HCS is an independent licensee of the Blue Cross and Blue Shield Association.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Horizon Casualty Services, Inc. The editorial staff of Risk & Insurance had no role in its preparation.

Horizon Casualty Services Inc., an affiliate of Horizon Blue Cross Blue Shield of New Jersey, in business since 1994, is a leading PPO in New Jersey workers' compensation and personal injury protection. The company's 100% direct-contracted provider network includes almost all New Jersey acute care hospitals, significant overall WC savings and, with its deep focus on precision, an extremely low WC appeals rate of 0.2%. Its PPO results, combined with its WC healthcare value and OFN strategy, enables insurers to be the best at delivering quality medical care to claimants at the right cost — clearly a win-win for all.