December 20, 2025  

California Workers’ Compensation Market Is Hardening

After nearly a decade of soft market conditions and falling premiums, California’s workers’ compensation landscape is experiencing a significant shift.

According to multiple industry sources, including the 2026 US Workers’ Compensation Market Outlook from Risk & Insurance, California’s combined loss ratio reached 127% in 2024. This is the highest level in more than two decades. That means carriers are projected to pay $1.27 in losses and expenses for every $1.00 in premium earned which is triggering a rate response and stricter underwriting practices.

Because California represents nearly 25% of the national workers’ compensation market, what happens here influences pricing, underwriting, and coverage trends nationwide.

Why California Costs Are Rising

Several key factors are currently reshaping the workers’ compensation landscape in California according to Risk & Insurance:

  • Medical and Legal Cost Inflation: Rising medical pricing, medical-legal billing charges, and indemnity costs are driving severity higher.
  • Cumulative Trauma Claims: CT claims now account for nearly 25% of California indemnity claims, far above national averages, increasing claim complexity and cost.
  • Remote Litigation (“Telelegal”): Virtual hearings have expanded litigation activity statewide, increasing defense costs and frequency.
  • Wage Inflation: When wages go up, workers’ comp benefits increase too, especially disability payments, and it’s even more noticeable with California’s minimum wage increases.

These combined influences have reversed the pattern of declining rates, resulting in increased premium expenses across the state.

How This Is Changing Underwriting

Carriers are tightening their approach and returning to more disciplined underwriting including:

  • Higher minimum premiums
  • Fewer discretionary credits
  • More frequent debits on experience mods
  • Net renewal increases of 20% or more, even on clean accounts

Here’s my advice for California employers and their 2026 workers’ comp renewals:

  • Start early: 90+ days before expiration
  • Review loss runs and reserves carefully: inconsistencies can be costly
  • Clearly describe your risk management strategies, focusing on your safety programs and return-to-work protocols for employees.
  • Check your payroll and class codes: small mistakes can lead to significant costs

As your broker, I am committed to a proactive, strategic approach to your workers’ comp renewals, going beyond reactive tactics. This allows us to address potential issues upfront, ensuring the best outcomes for your business.

By working together, we can create impactful risk narratives, making your work comp insurance more desirable for underwriters. We can also adopt a proactive strategy to uncover cost-effective solutions through audits and in-depth reviews of safety documentation, guaranteeing the most favorable pricing and coverage.

Workers’ comp in California is at a turning point and the employers who plan ahead will be the ones who control cost, maintain coverage, and avoid last-minute surprises in 2026.

October 28, 2025  

Why Your Commercial Auto Insurance Is Increasing

If your business owns or operates company vehicles, you’ve definitely seen your commercial auto insurance premiums rise in recent years. Whether you have a a few vans for deliveries, many service trucks, or a small sales fleet, your business is not immune to the rising commercial auto insurance costs.

You’re not alone. Across the country, insurers are reporting double-digit increases driven by several economic and behavioral trends. But understanding why rates are rising is important. Knowing what you can do to control your costs is crucial. This knowledge can make a big difference for your bottom line.

Here’s what’s driving 2025’s auto insurance market, based on Travelers’ recent analysis of national trends.

1. The Cost of Accidents Keeps Rising

Medical costs, vehicle repair costs, and legal expenses have all climbed sharply. Even a minor fender-bender now costs thousands more to settle than it did a few years ago.

What you can do:

  • Make driver safety a non-negotiable part of your business culture.
  • Review your loss-control programs regularly.
  • Implement driver training and enforce policies for seatbelt use, mobile phone restrictions, and safe following distances.

2. Lawsuits Are Bigger and More Frequent

“Nuclear verdicts” — jury awards exceeding $10 million — are now more common. Even small claims often involve higher legal fees and settlements.

What you can do:

  • Make sure your liability limits are sufficient; a $1M policy might not go as far as it once did.
  • Consider adding an umbrella policy to protect against catastrophic claims.
  • Document all driver training, vehicle inspections, and maintenance — this can be critical in defending a claim.

3. Distracted Driving Is a Growing Problem

Cell phones, dashboard screens, and in-cab tech have created more opportunities for driver distraction. Even one distracted-driving claim can significantly impact future premiums.

What you can do:

  • Adopt a written distracted-driving policy — and enforce it.
  • Use telematics or driver-monitoring tools to track unsafe behavior.
  • Reward safe driving performance and make accountability part of your company culture.

4. Newer, Less-Experienced Drivers Mean More Risk

The national driver shortage has forced many businesses to hire younger, less-experienced drivers. Unfortunately, accident data shows that inexperience leads to more claims.

What you can do:

  • Require new hires to complete safety orientation before driving company vehicles.
  • Pair newer drivers with seasoned employees for mentorship.
  • Review MVRs (motor vehicle records) regularly and establish clear standards for eligibility.

5. Vehicle Repair and Replacement Costs Have Soared

From supply-chain disruptions to advanced vehicle technology, repairs are simply more expensive. A cracked sensor-filled bumper can cost thousands to replace — and insurance reflects that.

What you can do:

  • Keep vehicles well-maintained and up-to-date with safety systems.
  • Install anti-theft devices to deter catalytic converter theft.
  • Evaluate whether certain vehicles should be replaced or removed from service.

6. Third-Party Drivers Can Create Hidden Liability

If your company uses contractors, delivery partners, or outside carriers, you could be held responsible if they’re involved in an accident. This is true even if you don’t directly employ them.

What you can do:

  • Verify that all vendors and contractors carry proper insurance.
  • Require certificates of insurance and written hold-harmless agreements.
  • Review contracts annually to ensure you’re protected from vicarious liability.

How to Take Control of Your Auto Insurance Costs

You can’t control market inflation or national loss trends — but you can control how your business manages risk. Insurers reward companies that demonstrate strong safety programs, driver accountability, and proactive fleet management.

Here’s how to start:

  • Review your coverage limits and deductibles annually.
  • Implement or update your driver safety program.
  • Track claims trends and address root causes early.
  • Work with a broker who can advocate for your business and negotiate terms based on real risk improvements.

Final Thoughts

Commercial auto insurance is one of the most volatile segments in today’s market. However, informed and proactive business owners can keep costs in check. If your company operates vehicles or relies on drivers to serve clients, now is the time to strengthen your risk management approach.

Contact me to discuss ways to reduce your exposure. This will put you in a stronger position for your next renewal.

-JK

October 20, 2025  

Guest Appearance: Talking Business and Insurance with Chris Chudacoff of True Point Lending

I recently had the opportunity to join my friend Chris Chudacoff on his podcast. It was an absolute honor.

Chris doesn’t cut corners. That’s immediately clear in the production quality of his podcast. It is evident in everything he does, personally and professionally.

For over 31 years, Chris has been helping clients secure the right real estate financing based on their goals and objectives. His company, True Point Lending, provides a noticeably different lending experience — one built on transparency, expertise, and genuine care for clients.

I’ve known Chris for several years, and he’s always my first call for any mortgage or real estate financing needs. I recommend him to family, friends, and clients without hesitation.

We had a great conversation about business, relationships, and the real challenges that come with building and protecting both.

👉 Watch the full episode here:

-JK

October 16, 2025  

Understanding Workers’ Compensation for Employees Traveling Out of State

You might assume your workers’ compensation policy only applies within your home state. But what happens if an employee gets hurt on a quick business trip? For example, they are attending a conference in Arizona or visiting a client in Nevada.

The good news: in most cases, your policy has you covered.

The Rule of Thumb

If your employee’s employment is principally localized in your home state — meaning that’s where they normally work or report from — your workers’ compensation policy typically extends protection even when they’re temporarily working or traveling elsewhere.

So if a California-based employee slips and falls while on a short business trip in Texas, your California workers’ compensation insurance policy would usually respond.

How Your Policy Handles This

Workers’ compensation policies have a section called:
Item 3.A – Covered States
This lists the states where your policy automatically provides benefits.

Then there’s Item 3.C – Other States Insurance, which acts as a safety net. It covers short-term or incidental work in states not listed in 3.A.
If your policy includes language like “All states except monopolistic states,” that means your employees are protected when they travel for temporary business outside your primary state.

When to Add Another State

That “Other States” safety net only goes so far.
If your business expands into another state — hiring local employees or setting up a remote team — you’ll want to add that state under Item 3.A to make sure you comply with local laws and avoid coverage gaps.

Also note: four states (North Dakota, Ohio, Washington, and Wyoming) are monopolistic, meaning they require a separate, state-issued workers’ comp policy.

Why It Matters

Even a quick, two-day business trip can lead to a claim — and if your policy isn’t set up correctly, you could be exposed to penalties or denied benefits.

By keeping your “Other States” coverage up to date, you’re protecting both your employees and your business from unnecessary headaches if someone gets hurt while on the road.

Final Thought

Workers’ compensation isn’t just about compliance — it’s about taking care of your people, no matter where work takes them.

If your employees travel, work remotely, or occasionally cross state lines, it’s worth a quick review to make sure your policy is structured the right way.

I help clients review these details all the time to make sure they’re fully protected in all states where they operate — even temporarily.

If you’d like a review of your current setup, feel free to reach out.

-JK

October 6, 2025  

Cyber Insurance Claims Drop 50% — But Smaller Businesses Are Now the Prime Targets

Cyber insurance claim severity dropped by more than 50% in the first half of 2025, according to Allianz Commercial’s Cyber Security Resilience 2025 report. That sounds like great news — until you dig deeper.

While large corporations are becoming harder to penetrate, attackers are pivoting toward smaller, less-protected firms — including professional services, tech startups, and manufacturers. In short: the battlefield has moved downstream.

The Shift: From Big Game Hunting to Small Business Targets

A few years ago, ransomware gangs chased multi-million-dollar payouts from global enterprises. Now, with those firms investing heavily in detection, response, and network segmentation, hackers are changing tactics.

Instead of targeting fortified enterprises, they’re going after smaller organizations with weaker defenses, faster paydays, and sensitive client data.

  • 88% of data breaches at SMEs in 2025 involved ransomware — compared to just 39% among large corporations.
  • Data theft (not encryption) is now the goal in 40% of large cyber claims — up from 25% in 2024.
  • Supply chain compromises caused 15% of large claim losses, more than doubling from the previous year.

Even more concerning: cloud intrusions surged 136%, as attackers exploit the same tools businesses rely on to stay connected.

Why Professional Services and Tech Firms Are in the Crosshairs

Professional service firms — law, accounting, marketing, and consulting — are increasingly being viewed as soft targets with high-value data.

These firms store client records, financial details, and intellectual property — a gold mine for threat actors seeking ransom leverage.

Meanwhile, human error remains the weak link. Nearly 60% of breaches stem from employee mistakes or manipulation. Social engineering and AI-generated phishing are driving credential theft.

It’s not just data loss anymore. Privacy-related litigation is exploding. There were 1,500 data privacy lawsuits filed in the U.S. last year alone.

The Silver Lining: Prevention Is Paying Off

Allianz’s data shows insured companies’ proactive measures are working:

  • Basic controls like patching, MFA, and network segmentation prevented many incidents entirely.
  • Firms with active detection and response systems saw claims costs reduced by as much as 1,000x.
  • Insured cyber losses rose only 70% over four years. This increase is small compared to a 250% rise in total global cybercrime costs.

In other words, insurance and prevention together create resilience.

What This Means for Your Business

If you’re a small or mid-sized business, the takeaway is clear: You are now the primary target.

Even if your company isn’t “big enough to hack,” your data — client files, contracts, or employee records — is.

Cyber insurance is no longer just a risk transfer tool; it’s a business continuity lifeline. Policies today not only pay for forensic recovery, legal defense, and ransom negotiation — they often include 24/7 access to cyber response teams that can contain incidents before they spiral.

Action Steps: Building Resilience in 2025 and Beyond

  1. Review your security controls: Enable multi-factor authentication across all systems and vendors.
  2. Train your employees: Human error drives most breaches. Ongoing awareness training matters.
  3. Map your vendor dependencies: Supply chain attacks are rising fast.
  4. Pair insurance with prevention: Use your policy benefits — hotlines, breach coaches, and vendor response partners — before you need them.
  5. Reevaluate your limits: Cyber claim severity may be down, but costs like regulatory fines and lawsuits are rising sharply.

Final Thought

The Allianz report confirms what many of us in the insurance industry have seen firsthand. The cyber threat landscape isn’t shrinking. It’s shifting.

For businesses that rely on client trust and data integrity, cyber insurance isn’t optional. It’s essential.

Because in 2025, the question isn’t if your systems will be tested — it’s how prepared you are when they are.

-JK

September 9, 2025  

August 2025 Insurance Trends: What SMBs Need to Know

Running a small or mid-sized business comes with enough challenges—managing insurance costs shouldn’t feel like deciphering Wall Street reports.

Every month, the Ivans Index tracks how commercial insurance renewal rates are trending nationwide. The August 2025 results are in, and there are a few key takeaways that matter directly to your bottom line.

Commercial Insurance Rates Are Still Climbing, But at Different Speeds

  • Commercial Auto: Renewal rates slowed slightly, now averaging +7.19% (down from 7.96% in July).
  • Businessowners Policy (BOP): Continued climbing to +7.65% (a bump from 7.55%).
  • General Liability: Saw one of the bigger jumps, moving to +5.91% (from 4.98%).
  • Commercial Property: Ticked down slightly to +7.84% (from 7.98%).
  • Umbrella Liability: Rose to +9.02%, the highest among all lines.
  • Workers’ Compensation: Still trending negative at –1.45%, but that’s actually good news—premiums are still decreasing year over year.

What This Means for SMBs

  1. Auto Fleets & Delivery Vehicles
    If your business owns company cars or vans, you may see some relief compared to earlier this year. But, rates remain elevated. Now is the time to revisit fleet safety programs, driver training, and telematics—steps that can earn discounts.
  2. Protecting Your Core Business (Businessowners & Property)
    BOP and property insurance continue to trend upward. For businesses that rent or own space—or rely heavily on equipment and inventory—this means budgeting for higher premiums at renewal. It’s also a reminder to double-check coverage limits: rebuilding and replacement costs are still affected by inflation.
  3. Liability Coverage
    Both General Liability and Umbrella are climbing. With lawsuit costs rising, insurers are charging more to provide extra protection. SMBs often underestimate their liability exposure, but a single claim can easily pierce through a $1M policy. Umbrella coverage, while pricier, is becoming more critical.
  4. Workers’ Compensation
    The lone bright spot—rates remain in the negative. If your payroll has grown, this can help offset increases elsewhere. Strong safety programs and low claims history can keep this trend working in your favor.

Why Staying Ahead Matters

The Ivans Index pulls data from over 120 million transactions across 700+ carriers and 38,000 agencies. In short: these numbers reflect what’s actually happening in the market right now.

For SMB owners, the lesson is clear:

  • Don’t wait until renewal time to discover higher premiums.
  • Review your policies proactively with your insurance broker.
  • Explore risk management strategies that can reduce claims and keep costs in check.

Final Takeaway

Insurance costs for small and mid-sized businesses are still trending upward, especially in liability and umbrella coverage’s. Workers’ comp is the exception, offering some balance.

By planning ahead, SMBs can manage these shifts. They can do this by working closely with a knowledgeable advisor. This approach protects both their people and profits.

August 21, 2025  

California Workers’ Compensation: First Rate Increase in a Decade

For the first time in 10 years, California’s workers’ compensation rates are increasing.

The state has approved an 8.7% rate increase, driven by sharply rising claim costs and industry-wide financial strain.

The Workers’ Compensation Insurance Rating Bureau (WCIRB) projects the 2024 Accident Year Combined Ratio at 127%. This is the highest ratio since 2001.

Put simply, carriers are paying out $1.27 for every $1.00 of premium collected, which is unsustainable without pricing adjustments.

Why Are Costs Rising?

There are three major culprits behind the jump in workers’ compensation costs:

  1. Cumulative Trauma (CT) Claims
    CT claims are injuries that occur over time rather than from a single incident. They are rising rapidly. These claims are more complex, harder to close, and often stay open for years, adding significant cost to the system.
  2. Rising Medical Costs
    After years of stability, medical costs turned sharply upward in the past year. Factors include higher provider charges, more advanced (and expensive) treatments, and longer recovery times.
  3. Increased Litigation
    Loss adjustment expenses are climbing as litigation becomes more common. Disputes over claims often extend case duration’s and increase settlement values.

Together, these trends are straining the workers’ comp system. Unfortunately, employers will start to feel the impact as a result. It shows in the form of higher premiums.

What This Means for Employers

If you’re a California employer, expect workers’ comp pricing to firm in the coming policy renewal cycles. While legislation may eventually need to address systemic cost drivers, the immediate impact is higher insurance costs.

Now [and always] is the time to:

  • Focus on claims prevention: Invest in workplace safety programs and early intervention for injuries.
  • Review your claims history: Cumulative trauma claims often arise when small issues aren’t addressed quickly.
  • Work with an experienced broker: Having the right advocate can help you navigate pricing changes. They can also help you in exploring coverage options. Additionally, they implement risk management strategies to control costs.

My Take

While rate increases are never welcome news, disciplined carriers and proactive employers can still manage costs effectively. As your broker, our role is to help you stay ahead of these changes. We control risks and make sure you’re partnered with carriers who remain stable, consistent, and service-oriented. This is crucial in a hardening market.

-JK

June 25, 2025  

The True Value of Custom Business Insurance Policies

I was dropping off some clothes at my local dry cleaners a couple of days ago. In the retail center, I saw a barbershop advertising haircuts for $13. That’s it. That’s all the sign said. Not Tony’s Barbershop or anything like that.

Naturally, it caught my eye — because who doesn’t appreciate a good deal? Even more, it’s kind of nice to know up front how much a service is going to cost. No uncertainty, it’s just posted right there for everyone to see.

I’m not a fan of haggling. I’d prefer to buy a car with the price set. I don’t want to sit in a dealership and negotiate for four hours questioning myself, did I get ripped off? But at the same time, price isn’t everything. What’s the value?

This got me thinking. I am often asked by clients or potential clients, “How much will an XYZ policy cost?”

Since business insurance is not a commodity, there’s no up front answer unfortunately.

One-Size-Fits-All Doesn’t Work for Business Insurance

A $13 haircut works because the service is relatively simple, fast, and repeatable. One head of hair is pretty comparable to the next. I know that’s a generalization, but you get what I mean. No matter who walks in, they get the same base offering.

Business Insurance doesn’t work that way.

Let’s put this in the perspective of Professional Liability insurance (Errors & Omissions).

Your business has unique exposures. The way you interact with clients impacts your risk profile. How you structure your contracts is crucial. The way you manage your operations also plays a role. Additionally, how you handle mistakes or disputes affects your risk profile.

Before a policy can even be priced, an underwriter needs to understand:

  • What services your business provides
  • What your client engagements look like
  • Whether you use formal written contracts
  • How you handle complaints or errors
  • If you’ve had claims in the past

You don’t just pick a price off a menu. You submit an application, answer questions, and let the underwriter assess the actual risk.

“Just Give Me a Quick Quote” Doesn’t Cut It

It’s tempting to want a quick quote. Many websites offer instant insurance at seemingly bargain prices.

But when it comes to Professional Liability (E&O) insurance, you don’t want cookie-cutter coverage. You want a policy that actually responds to the types of claims your business face.

In my work with professional service firms — law practices, marketing agencies, consultants, managed service providers, etc. — I’ve seen too many “cheap” policies fail. They fail at the worst time. This happens because no one took the time to do it right.

The Bottom Line

For some things in life, it’s nice to know up front what something’s going to cost you. A car, a haircut, a 12-pack of beer….fine. But business insurance isn’t a commodity.

With business insurance, you’re not just buying a policy. You’re buying peace of mind that your business is protected when something goes wrong.

Ask questions. Work with someone who understands your industry. And don’t settle for a haircut when what you really need is a custom-fit suit.

Need help reviewing your liability insurance coverage?
Let’s have a real conversation about your business — not just your budget.

-JK

June 10, 2025  

Cybercriminals Are Targeting Small Businesses – Is Yours Next

Your Business Is Being Targeted—Even If You Don’t Realize It

It’s not just big corporations making headlines anymore. Small and midsize businesses are now prime targets for cybercriminals—and the numbers don’t lie.

Ransomware remains the most disruptive threat in today’s digital world. The newly released Cyber Threat Index 2025 from Coalition reveals how these attacks are happening. It shows why it’s time to take this risk seriously.

Startling Realities from the Report:

  • 58% of ransomware attacks in 2024 began with a breach of VPNs or firewalls
  • 18% involved remote desktop tools
  • 47% began with stolen or guessed login credentials
  • Email phishing and unpatched software rounded out the top attack methods

What This Means for Your Business

Think about the systems your team uses every day—remote logins, email, cloud apps. Now imagine they’re all frozen… encrypted by criminals demanding a six-figure ransom just to give you back control.

It’s not science fiction. It’s happening to businesses just like yours—some of them never recover.

The worst part? Most attacks succeed not because the defenses are complex, but because they’re familiar. Cybercriminals keep reusing the same tactics because they still work.

And while enterprise-level companies have IT teams monitoring for threats around the clock, many small and midsize businesses don’t. That’s where cyber insurance becomes more than a policy—it becomes a lifeline.

How Cyber Insurance Protects You:

A robust cyber insurance policy can help cover:

  • Ransom payments (where legal)
  • Digital forensics and IT recovery
  • Business interruption and income loss
  • Data restoration and rebuilding
  • Regulatory fines and legal defense
  • Customer notifications and credit monitoring

4 Things You Can Do Right Now:

  1. Harden remote access tools – Use multi-factor authentication (MFA) across VPNs and remote desktops
  2. Educate your team – A well-timed click on a phishing email can cost your business everything
  3. Patch and update software – Vulnerabilities in outdated tools are low-hanging fruit for attackers
  4. Review your cyber insurance – Your policy should reflect your current systems and risks

Final Thought:

Cybercriminals aren’t getting more creative—they’re just getting more persistent. And far too many businesses are still unprepared.

The good news? Cyber insurance remains one of the most affordable forms of protection available. This is especially true when compared to skyrocketing premiums you see in property or commercial auto.

If you’re not sure whether your coverage is enough, let’s have a conversation. Or if you don’t have cyber protection in place at all, let’s talk.

It could be the most important step you take for your business this year.

-JK

June 5, 2025  

Importance of Liability Clauses in Business Contracts

“Do you use your standard contract with your customers that includes a limitation of liability clause and/or hold harmless agreement?”

When applying for liability insurance, you’ll find this question on pretty much all insurance carrier applications.

If you do not use a standard contract or agreement with your customers/clients and they do not include limitation of liability clause and/or hold harmless agreement, chances are you’ll

1- Be declined by carriers
2- pay higher premiums
3- or deal with an array of coverage limitations/exclusions.

Best Practice Recommendation:

-Use written contracts consistently, especially for higher-value jobs or services.

  • Include at minimum: Limitation of liability, Indemnification/hold harmless clause, Insurance requirements for the other party.

Have contracts reviewed by a qualified business transactional attorney to ensure enforceability.

Having these measures in place not only protects your business—it also signals to insurers that you manage risk proactively.

All this can save your business from extreme financial risk. Added bonus, less insurance premium and better coverage.

-JK

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