Tag Archive | insurance
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.

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

October 3, 2024  

How to Prepare for Your Workers Compensation Audit

Your Workers Compensation insurance policy premium is rated based on annual payroll. When your policy is first issued, an estimated annual payroll is used looking ahead at the next 12 months.

In most cases, it’s almost impossible to forecast what your exact payroll will be for the next twelve months. Especially with hourly employees where schedules constantly fluctuate and you have peak seasons and slow periods.

So, when you buy a workers compensation insurance policy for the first time, or are renewing for a new policy term, annual payroll estimates are used to calculate the policy premium. and at the end of the annual policy term, the insurance carrier must do a premium audit to find out what the official payroll amounts are for the prior 12 months.

Let’s face it, audits suck. It doesn’t matter what kind of audit….insurance, taxes, you name it. Can you think of any audit that doesn’t suck? Unfortunately, workers compensation policy audits are not optional, they’re required by any and all carriers.

So, how should you prepare for your Workers Compensation policy audit?

The best way to prepare is by keeping proper records and documentation throughout the policy period. An audit is conducted based on the review of correct, organized records.

Since your workers’ compensation policy is payroll based, the following documents are typically needed by the auditor:

  • Quarterly 941 tax documents/payroll registers
  • Employee information, including:
    -Names
    -States
    -Description of duties
    -Gross wages
  • Furloughed wages
  • Contracted labor
    -Certificates of insurance for subcontractors, if applicable
    -Description, location and dates of work performed
    -Amount paid for contracted labor

What can I expect?

Your audit will be conducted in one of the four methods:

  1. On-site physical
  2. Electronic/virtual physical (counts as physical by all state bureaus)
  3. Phone
  4. Mail

The method is determined based upon multiple factors, including premium, complexity and state regulations. An auditor will reach out to you after your policy expiration via phone, email or letter to give you more information.

Yes, audits suck, but unfortunately there’s no way around it. As long as you’re organized and prepared with this information, hopefully your next audit will be smooth and painless and you can put it behind until next year where you have the joy of doing it all over again.

Enjoy!

-JK

September 26, 2024  

Cyber Risks Lead 2024 Business Concerns in Travelers Survey

For 11 years, Travelers has posted an annual Risk Index. The Risk Index is a survey that looks at the top concerns of U.S. businesses, and how they manage them.

Their 2024 survey takes a deep dive into the top concerns of U.S. business leaders from small, medium and large businesses across a wide range of industries.

Some of these risks involve well-known issues, like rising medical costs, broad economic uncertainty, and the ability to attract and retain talent.

Cyber risks are the #1 business concern in 2024 per the survey. 62% of the 1,200 or so respondents cited cyber as a top concern.

Cyber ranked higher as a concern than medical cost inflation (59%), increasing employee benefits costs (59%), broad economic uncertainty (59%), and the ability to attract and retain talent (54%). Medical cost inflation was the highest concern last year.

I included a link to the 2024 Risk Index above but here’s the LINK again for reference.

If you have questions about cyber insurance coverage or would like to see what the cost would be for a cyber insurance policy for your company, please contact me to discuss.

-JK

September 28, 2018  

Small Businesses Are Opening Faster Than They Are Closing

Yesterday, the Small Business Administration (SBA) Office of Advocacy published a fact sheet by research economist Daniel Wilmoth that indicates more small businesses are opening than closing. In 2017, the number of businesses in the U.S. increased by about 118,000 with various levels of growth depending on the region. In all, 975,000 new businesses had opened by the end of 2017. The number of businesses that closed fell from 859,000 in 2016 to 857,000 in 2017. Business openings have exceeded business closings for 28 consecutive quarters, Wilmoth noted. California accounts for nearly one-third of the net increase of businesses in 2017, with 38,000.

Source: Long Beach Business Journal

-JK

August 6, 2015  

Insurance For Condo Homeowners Association in Harbor City

Effective 8/9, I finalized insurance for this Condo Homeowners Association in Harbor City. This is an 18-unit, 25,850 total square feet dual building property. Coverage’s include Commercial Property insurance for the structures, General Liability, and Director’s & Officer’s Liability to help protect the association board. The expiring policy didn’t include the D&O. I was able to add this coverage and still save premium dollars compared to the renewal terms the association received from the incumbent broker.

HOA 1-JK

July 24, 2014  

Access Your UV Index With This Online Tool

Did you know that you can access your UV index, which provides a forecast of the risk of overexposure to UV rays? This is a helpful tool for employers with outdoor workers.

Protect your outdoor employees from UV rays; check your UV index here: http://www2.epa.gov/sunwise/uv-index

As we speak, the temperature in long beach is 91+ degrees right now. The UV Index is 11 which is extreme:

UV Index

At 11, protection against sun damage is needed. If you need to be outside during midday hours between 10 a.m. and 4 p.m., take steps to reduce sun exposure. A shirt, hat and sunscreen are a must, and be sure you seek shade. Beach-goers should know that white sand and other bright surfaces reflect UV and can double UV exposure.

Check your UV index for yourself and be sure to keep outdoor employees protected from the sun.

-JK

June 25, 2014  

Employers Rethink Benefits

According to the new Aflac Workforces Report, 49% of employers agree that controlling costs is the top business issue facing companies today. In 2013, as a result of Affordable Care Act (ACA) implementation and rising costs, businesses:

  • Eliminated or delayed raises (32%)
  • Eliminated or cut back on benefits (22%)
  • Changed some full-time workers to part-time workers (21%)
  • Reduced the number of major medical plan options (14%)

Credit:  iamagazine.com

-JK

June 23, 2014  

Download OSHA’s Heat Safety Tool To Keep Workers Safe

When you’re working in the heat, safety comes first. With the OSHA Heat Safety Tool, you have vital safety information available whenever and wherever you need it—right on your mobile phone.

The app allows workers and supervisors to calculate the heat index for their work site, and, based on the heat index, displays a risk level to outdoor workers. Then, with a simple click, you can get reminders about the protective measures that should be taken at that risk level to protect workers from heat-related illness.

For more information about safety while working in the heat, see OSHA’s heat illness Web page, including new online guidance about using the heat index to protect workers. Download the app directly from OSHA’s website.

Photo by: CAL-OSHA

Photo by: CAL-OSHA

June 19, 2014  

The Ins and Outs of Small Business Insurance

Being an entrepreneur makes you the boss, but along with getting to choose your own hours, location, and business plan, it also means that you’re responsible for a lot of other things like commercial/business insurance. There’s a lot more to business insurance than getting the lowest business insurance quotes. It means understanding your business’s unique needs and the potential hazards that can threaten its success.

This brief video from the Insurance Information Institute touches on the ins and outs of small business insurance, including coverage for:

Credit: Insurance Information Institute

-JK

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