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Changes of company ownership – Workers Comp Specific Rules


Workers Compensation Changes Of Company Ownership

The E-Mod liabilities change for Workers Compensation during changes of company ownership. I received a question last week concerning company ownership liabilities when a company is acquired by another company or individual.

Two businessman changes of company ownership shake hands
Wikimedia Commons – Duisenberg

There are actually very long and somewhat complicated rules on Experience Modification Factors (E-Mods or X-Mod in California) when there is a change in company ownership. I will leave that for another time. The question was more centered around premiums and the audit bill.

Without giving legal advice, a company’s change of ownership will not affect the premium audit and billing process. The new owner will owe the premiums as if the company had not changed. If an individual is going to purchase a company, the liability of an upcoming premium audit and billing should be factored into the current and future liabilities.

We had a client call us into this very situation a few years ago in California. They were under the impression that the previous owner would be responsible for the billing. The premium auditor assessed a $25,000 premium audit bill against the new owner.

Unfortunately, the new owner had to pay the bill. We were able to reduce the bill due to a classification error by the auditor. However, the new owner did have to pay an unexpected bill.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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