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
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.
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
Important Changes to Workers’ Compensation Posting Notice in California
On July 15, California State Governor Newsom signed AB1870. This bill amends Labor Code 3550. It adds language to the workers’ compensation posting notice, DWC-7, that informs employees of their right to consult an attorney. This update takes effect 1/1/2025 and applies to any workers’ compensation policy, regardless of renewal term.
California has published the revised DWC7 which can be found HERE.
If you are are a California Workers Compensation insurance policyholder, I recommend that you:
- Continue to report injury claims promptly
- Educate managers, supervisors, and employees about their rights and the proper steps to take if an injury occurs
- Supply the latest version of the DWC7 posting notice
- Post the updated notice in a conspicuous place, where all employees have access to it (failing to post is considered a misdemeanor and can result in fines)
- Talk with your Workers Compensation insurance provider about Back to Work options at your business
If you have questions, contact me.
-JK
First Year Workers Account for 40% of Workers Compensation Claims
Workers who have been employed for less than a year are responsible for almost 40 percent of all workers’ compensation claims – according to the Workers’ Compensation Insurance Rating Bureau of California (WCIRB). This is staggering if you ask me. 40%?!!
There are many reasons that can lead to this statistic. Employee inexperience, unfamiliarity with workplace hazards and insufficient training to name a few.
The good news is, there was ways to help you ensure the safety of your new employees, preparing them properly for the workplace, preventing incidents and lowering claims.
Here are 7 proactive steps you can take to ensure the safety of your new employees. Actually, for ALL employees, but the emphasis here is the new employees who statistically show to be at higher risk:
1 – Comprehensive Onboarding and Training
Implement thorough onboarding programs that include detailed safety training. Make sure new employees are well-versed in workplace hazards, proper equipment use, and emergency procedures.
2 – Mentorship Programs
Create a supportive environment by pairing new employees with experienced mentors. These mentors can guide them through the job’s safety aspects and offer ongoing support, making them feel less isolated and more confident in their roles.
3 – Safety Culture Promotion
Foster a strong safety culture where employees feel comfortable reporting hazards and unsafe conditions without fear of retaliation
4 – Regular Safety Audits
Conduct regular safety audits and risk assessments to find and address potential hazards that affect new workers.
5 – Ergonomic Assessments
Make sure workstations and tasks are ergonomically designed to reduce strain and prevent injuries, particularly in industries like construction and restaurants where physical strain is common.
6 – Clear Communication
Keep open lines of communication about safety expectations and procedures. Encourage employees to ask questions and seek clarification on safety matters.
7- Adjust Workloads
Gradually increase the complexity and intensity of tasks assigned to new employees to allow them to build experience and confidence without overwhelming them
Proactively implementing these strategies significantly contributes to a safer work environment, reducing injuries among first-year employees and showing your commitment to their well-being.
But I want to emphasize, make sure you’re focusing on the safety and wellbeing of ALL employees. This creates a safe, positive work environment that can save a ton on operational costs by keeping your Experience Modification Rating DOWN.
I’m here to help!
if you have any questions or concerns, please contact me at jkinmartin@olsonduncan.com
Thanks for reading
-JK
Why Are Commercial Property Insurance Costs So High Right Now?
The market for commercial property insurance has been getting more and more challenging over the past couple of years and it’s feeling like there’s no immediate end in sight.
Over the past 12 months, we’ve seen countless insured’s get non-renewed on their property insurance policies even with no claims. Very few markets are looking to write new business unless a risk is impeccable. Underwriting is tight and it seems like you have to go through hell and back providing loads of information to carriers for review.
In many cases, coverage is getting cut in half with limitations and endorsements and premium is doubling. It’s frustrating to be in the thick of all of it. No doubt, this is the hardest property insurance market we’ve seen in a generation.
So, why are commercial property insurance costs so high you ask?
Here are several factors contributing to premium increases for commercial property insurance coverage:
Catastrophe Losses: Hurricanes, floods, wildfires, tornadoes, winter storms. The frequency and severity of major catastrophes continue to stress the industry. In five of the past six years, these events have caused annual insured losses of more than $100B. Last year, total insured losses globally were estimated at a shocking $140B.
Reinsurance: Catastrophic events are a major factor driving up the cost of reinsurance — an expense carriers need to pass along to policyholders. Call it a perfect storm, but inflation and the economic environment has been making reinsurers more selective.
Underinsurance: High inflation has driven the cost of materials and services much higher, but not even half of business owners say they have increased their policy limits to accurately reflect what it would take to replace insured property now. Policyholders must have accurate valuations for their assets so they don’t come up short after a loss, and premiums will reflect those higher values.
Property Replacement Costs: Led by sizable increase in the cost of structural steel and the price of lumber, construction costs have jumped over the past few years. Similarly, machinery and equipment costs have increased over the same period. Also, many are still dealing with materials shortages and supply chain disruptions.
Skilled Labor Shortage: Nearly half of reconstruction costs are wages and salaries, which have increased over the past few years. Even with higher pay, contractors are struggling to find skilled labor and are delaying projects as a result. Higher rebuilding costs and longer delays may trigger an increase in business interruption losses.
Property Rate Need: For years, rising loss trends have outpaced rate increases, primarily because of the costs of catastrophes. Carriers need to continue to raise rates to try to close the gap.
In a nutshell, it’s a “perfect storm” of these variables that have really put the commercial property insurance market in a tough spot. And in talking to many professionals in the industry, this doesn’t seem to be ending any time soon. Maybe by way of a miracle we can get a year with [much] lower than average catastrophe loss? That would be a good start. And we definitely need inflation to level out too. Maybe we can get the perfect storm to happen the opposite way to get us back on track for a more stabilized commercial property insurance market. Fingers crossed.
75% of Small Businesses Are Underinsured According to New Survey
According to the 2023 Hiscox Underinsurance in Small Business Report, which surveyed 1,000 small businesses last July, just about half of small businesses’ revenues are on the rise.
47% of small businesses surveyed have experienced a revenue increase since 2021. 32% have had a decrease in revenue.
Those businesses that have expanded in the past two years may now be underinsured, while those that have seen revenues drop may be paying more than they need to.
The 2023 Hiscox Underinsurance in Small Business Report “gauges US businesses’ protection against potential lawsuits and claims, as well as testing their understanding of insurance policies.”
The survey found widespread insurance illiteracy and a nationwide underinsurance crisis, leaving small businesses open to loss risks ranging from property damage to lawsuits.
Of the small businesses participating in the survey, 75% of small businesses in the U.S. do not possess sufficient insurance.
The type of coverage most businesses have is also important. When asked what kind of coverage businesses had, this is what Hiscox found:
- 65% had general liability coverage
- 45% had property insurance
- 35% had worker’s compensation insurance
- 32% had professional liability insurance
Of those businesses that had coverage, 68% of those with coverage purchased it because they were concerned about the consequences of a potential claim. Only 20% noted they purchased insurance because a vendor or partner mandated it.
A growing business is a good thing but it’s important to be sure your insurance coverage keeps up. The importance of working with a knowledgeable insurance broker is paramount. And not only a broker that is knowledgeable, but one who is proactive and continuously working with your business as it grows to ensure coverage is tailored to meet the risk exposures that come with expansion.
Have questions about your business insurance?
Cyber Risks Remain a Top Business Concern
The 2023 Travelers Risk Index reveals that in an ever-changing world filled with fluctuating and emerging threats, cyber risks remain a top overall business concern.
The Travelers Risk Index provides an annual snapshot of risk viewpoints from over 1,200 business decision makers across the country. The 2023 survey looks at the top concerns of U.S. businesses and how companies are dealing with the risks they face every day. The survey participants represent small, mid-sized and large businesses from a variety of industries including construction, real estate, healthcare, technology, retail, transportation, wholesalers, professional services, manufacturing, banking/financial services, publicly traded, nonprofit and public sector.
Notably, 58% of survey participants say they worry about cyber risks.
The cyber concerns facing organizations include unauthorized access to financial accounts, a security breach/someone hacking into a system, system glitches, ransomware and someone using a phishing email to fool employees into transferring funds out of an organization.
See the results of the 2023 Travelers Risk Index and tips HERE.
What is the Terrorism Risk Insurance Act (TRIA)?
Terrorism is often an excluded peril on property and casualty insurance policies because the losses could prove to be too catastrophic for private insurers to underwrite coverage or because the inclusion of terrorism coverage would make policy premiums unaffordable for consumers. This uninsurability makes government assistance necessary.
The Terrorism Risk Insurance Act (TRIA) was enacted in direct response to the terrorist attacks on September 11, 2001. The act created a reinsurance facility allowing the federal government to share in losses with private insurers in the event a certified act of terrorism took place.
TRIA protects consumers by addressing market disruptions and ensuring continued widespread availability and affordability of commercial property and casualty insurance for terrorism risk.
TRIA is a temporary program that has been extended by a number of reauthorization acts. The program is set to expire December 31, 2027.
Authority
The act allowed the Department of the Treasury to establish the Terrorism Risk Insurance Program, administered by the Secretary of the Treasury. The legislation defined an act of terrorism as any act certified by the Secretary of Treasury, in cooperation with the Secretary of Homeland Security and Attorney General, to be an act of terrorism that endangered human life, property, or infrastructure and that was committed by an individual or group of people acting on behalf of any foreign person or interest.
The 2007 reauthorization act amended this definition to include acts committed by persons with no foreign affiliation to also be treated as acts of terrorism.
An act must result in at least $5 million in property and casualty insurance losses to be certified as an act of terrorism.
Insurance Limits
The program has a trigger applying to certified acts of terrorism.
In 2015, this trigger was insurance losses exceeding $100 million, and this amount increases incrementally by $20 million per year until reaching $200 million in 2020 (meaning the trigger amount for any year after 2020 is also $200 million). Private insurers and the government will share losses greater than the coverage trigger and less than the program cap, which is $100 billion.
The insurer deductible is 20% of all covered losses. Once the deductible is met, the insurance companies have a coshare, or share of the loss. This coshare amount started at 15% in 2015, meaning the government paid for 85% of covered losses, and incrementally increased until reaching 20% in 2020 (and thereafter), meaning the government pays for 80% of covered losses.
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 