Commercial Insurance Market Remains Firm, But Shows Early Signs of Moderation
According to the latest data from the Ivans Index, the commercial insurance market continues to stay firm overall. Nevertheless, there are early signals that conditions may be easing from the peak tightening we’ve seen in recent years.
For most major commercial lines, average premium renewal rates increased year-over-year in the fourth quarter of 2025. This is a sign that carriers are still disciplined in their pricing. They demonstrate careful underwriting. However, some lines showed moderation or even decreases compared to the prior quarter.
Here is some notable data by line of business (Q4 2025 vs Q3 2025):
Lines Showing Reduced Renewal Momentum
- Commercial Auto: Average renewal rate declined to 6.97% from 7.60% last quarter potentially indicating more competitive pricing or underwriting tightening easing. Based on other reports I regularly monitor, I don’t expect this to be the case anytime soon.
- Business Owners Policy (BOP): Averaged 7.52% with a slight reduction vs Q3.
- Workers’ Compensation: Continued its downtrend with a -1.61% change. Still negative but a modest move compared with prior quarters.
Lines Still Firm or Hardening
- General Liability: Saw a notable increase……7.23% in Q4 vs 5.89% in Q3.
- Commercial Property: Continued upward momentum with an average 8.01% renewal change.
- Umbrella: Also ticked up slightly, ending the quarter at 9.49%.
The data suggests the overall market is still firm, particularly in liability and property exposures where carriers remain cautious. That said, the softening in some lines, like commercial auto and workers’ compensation, indicates that carriers are adapting. They are reacting to evolving risk conditions and competitive dynamics.
For insureds, expect continued firm conditions in key exposures, especially if loss activity or inflationary pressures persist.
One thing that remains consistent, proactive risk management and strong loss history remain crucial differentiators when negotiating renewals with underwriters.
If you’d like help analyzing how these market trends impact your portfolio, I can also help with your renewal strategy. Feel free to reach out. I’m here to help you navigate this dynamic landscape.
-JK
An Orange County Judge Pleads Guilty in Workers’ Comp Fraud Case
Right here in our own backyard, a rare and high-profile workers’ compensation fraud case just went down.
Orange County Superior Court Judge Israel Claustro has agreed to plead guilty to federal mail fraud. This fraud is tied to California’s Subsequent Injuries Benefits Trust Fund (SIBTF). The program provides financial support to injured workers with pre-existing impairments.
Before and during his time on the bench, Claustro operated Liberty Medical Group, a business that arranged medical-legal evaluations for SIBTF cases. Federal prosecutors say Claustro secretly continued using Dr. Kevin Tien Do for report preparation and record review. This occurred even after Do was suspended from the workers’ comp system in 2018. The suspension was due to a prior health-care fraud conviction.
According to federal filings:
- Claustro paid Do over $300,000
- Liberty billed the SIBTF more than $3 million
- Do’s involvement was concealed from regulators
Claustro will resign as part of his plea agreement. While the charge carries up to 20 years in prison, prosecutors are recommending probation and home confinement.
This case stands out for three reasons:
- Unusual defendant: Cases involving sitting judges are extremely uncommon.
- Program vulnerability: Medical-legal reporting remains a pressure point in California’s workers’ compensation system.
- System trust: Fraud drains resources from injured workers and erodes confidence in public benefit programs.
Claimant and provider fraud get most of the attention. However, this case illustrates that workers’ compensation fraud risks exist at every level. It reinforces the need for oversight, credentialing, and compliance throughout the ecosystem. Because at the end of the day, businesses are paying the costs of those that fraud the system!!
-JK
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.
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
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
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
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
- Review your security controls: Enable multi-factor authentication across all systems and vendors.
- Train your employees: Human error drives most breaches. Ongoing awareness training matters.
- Map your vendor dependencies: Supply chain attacks are rising fast.
- Pair insurance with prevention: Use your policy benefits — hotlines, breach coaches, and vendor response partners — before you need them.
- 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
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
- 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. - 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. - 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. - 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.
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:
- 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. - 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. - 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
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
About Me
I grew up in Fullerton, CA and graduated from Servite High School in Anaheim. I have my Bachelors degree from Loyola Marymount University in Los Angeles. I currently live in Tustin, CA.
Please contact me if you need help with any of the following lines of insurance for your business:
-Cyber / Data Breach
-Commercial Property
-Commercial General Liability
-Products Liability
-Workers Compensation
-Commercial Auto
-Umbrella/Excess Liability
-Errors & Omissions/ Professional Liability
-Employment Practices Liability
-Directors & Officers
-Life & Disability Insurance
Jimmy Kinmartin, CPCU 