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
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
OSHA’s Top Ten Safety Violations for 2024
As OSHA unveils the 2024 list of its 10 most frequently cited safety violations, there are no surprises at the top once again. For the 14th consecutive year, Fall Protection came in at number one with 6,307 violations. It is far and away the most commonly cited standard following inspections of worksites for all industries. Hazard Communication was next at 2,888, followed by Ladders and Respiratory Protection.
OSHA’s 2024 Top 10 Safety Violations:
1- Fall Protection – General Requirements (1926.501) – 6,307 violations
2- Hazard Communication (1910.1200) – 2,888 violations
3- Ladders (1926.1053) – 2,573 violations
4- Respiratory Protection (1910.134) – 2,859 violations
5- Lockout/Tagout (1910.147) – 2,443 violations
6- Powered Industrial Trucks (1910.178) – 2,248 violations
7- Fall Protection – Training Requirements (1926.503) – 2,050 violations
8- Scaffolding (1926.451) – 1,873 violations
9- Personal Protective and Lifesaving Equipment – Eye and Face Protection (1926.102) – 1,814 violations
10- Machine Guarding (1910.212) – 1,541 violations
Do you need safe workplace resources like safety consultations, risk assessments, safety training webinars, or instructional videos? Contact me today. I have relationships with Risk Management consultants on how to be OSHA compliant.
-JK
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:
- On-site physical
- Electronic/virtual physical (counts as physical by all state bureaus)
- Phone
- 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
Build Your Injury and Illness Prevention Program: Easy Tool for California Employers
All California employers are required to create an Injury and Illness Prevention Program (IIPP) that’s tailored to their business and accessible to all employees.
The State Compensation Insurance Fund offers a no-cost, easy-to-use Injury and Illness Prevention Program IIPP Builder℠. Also, to make it easier for companies with Spanish-speaking employees, this is now available in Spanish too.
The tool is available to all California businesses, regardless of whether they are a State Fund policyholder. It’s easy to switch between English and Spanish, and offering a program in the preferred language of Spanish-speaking employees can help business owners create a culture of safety in their workplace, reduce the risk of injuries, and promote healthy practices.
I provided the links above, but to create an IIPP in English or Spanish, visit www.SafeAtWorkCA.com, then simply create an account and follow the prompts to build and save a customized program.
State Compensation Insurance Fund policyholders can log in to create and save their Injury and Illness Prevention Program then return to revise, update, or translate it whenever they need to.
Of course, building your own IIPP isn’t ideal for all businesses. Some are more complex and need the help of a dedicated safety consultant.
If your business needs help building a tailored Injury and Illness Prevention Program, contact me for resources and referrals to help with this. I have many.
-JK
It Takes Twice as Long to Close California Workers’ Comp Claims Compared to Other States
File this under the “I’m not surprised” file, it takes seven years to close most workers’ compensation claims in California, more than double the time in the median state.
The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) released a report detailing duration drivers for California workers’ compensation claims.
The report, Drivers of California Claim Duration, describes duration drivers for California workers’ comp claims, including how claim duration differs regionally across the state.
Here’s the report:
Highlights of the report include:
- It takes seven years to close 90% of claims in California compared to three years for the median state.
- Longer California claim duration is driven by four “duration drivers,” including a higher share of permanent partial disability and cumulative trauma claims in California, greater utilization of medical-legal services in California and regional differences within the state.
- Claim closing rates rose steadily following the reforms of Senate Bill 863, particularly for PPD claims of lower-wage workers.
- Claim closing rates declined during the pandemic in 2020 and were relatively flat in 2021.
California, why do you have to make everything so complicated? [banging head on desk]
Source: Insurance Journal
-JK
Be Observant When You’re Buying Insurance or Any Product or Service For That Matter
I’m working on some Worker’s Compensation insurance options for a referral which is a physician’s office. Very black and white with no question the proper classification is 8834 – Physician Practices and Outpatient Clinics.
This prospect received a “much less expensive” quote from one of the many carriers you see on every TV commercial break with their comedic ads. This quote was classified as a jewelry store with about a third of the total annual payroll. Of course, it is cheaper.
Folks, be observant when you’re buying insurance or any product or service for that matter. It’s only going to cost more in the long run if you don’t do your due diligence in reviewing and understanding what you’re buying. And most of that cost is YOUR time lost in trying to resolve the issue.
California Assembly Bill 5 Means Changes for Workers’ Compensation Insurance
California Assembly Bill 5 (also known as CA AB 5) was signed into law in September 2019, implementing a new test all employers must use to determine if a worker is an employee or an independent contractor under the California Labor Code. The law may impact who you cover under your workers’ compensation insurance policy.
While the bill is effective January 1, 2020, the part that affects workers’ compensation insurance coverage goes into effect July 1, 2020.
Know The Facts
- The new legislation is not based on policy effective date. As of July 1, 2020, as an employer, you’ll be subject to the new test. This means that a worker could be classified as an independent contractor before July 1, 2020 and as an employee after July 1, 2020.
- If you’ve employed an independent contractor that can supply you with a certificate of workers’ compensation insurance that is effective during your policy period, he/she would not be considered part of your employee roster. You would not report payroll for him/her.
- In order to avoid an unexpected change in exposures at time of audit, you must include payroll for all employees defined by the statute as of July 1, 2020.
- The statute applies to businesses headquartered in California AND businesses headquartered elsewhere with employees working in California.
Got questions? Contact me. I’m here to help you with this law change in any way possible.
-JK
Workers Compensation Insurance For Doctors
For all outpatient physician practices and clinics including physical therapists, acupuncturists, chiropractors, dialysis, x-ray laboratory services; and blood, body fluid, and tissue collection and testing.
We have a quality Workers Compensation insurance carrier applying major credits off the 8834 physicians class code. I haven’t found another carrier who can compete with them in this market.
I found this to be true for two of my clients in the past month as we marketed their workers’ compensation insurance policy renewals.
If you know of a doctor who is interested in us exploring this option on their behalf, please share this message. Now is a good time to start looking ahead at 2019 as you’re reviewing operational expenses and budgets.
-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 