Small businesses feel sticker shock from workers’ comp insurance hikes

Aug 27, 2013

Employees work in a monitoring office at

A survey by the LA Business Journal found that employers have been seeing rate hikes in workers’ compensation insurance.; Credit: KENZO TRIBOUILLARD/AFP/Getty Images

A spot survey by the Los Angeles Business Journal found some local employers hit with premium hikes exceeding 40 percent in the last year for workers’ compensation insurance. The shock is especially startling because legislation (SB863) passed last year was supposed to reform the ins and outs of workers compensation to nearly everyone’s satisfaction. However, the Journal found some extreme examples.

For instance, the Valley Industry and Commerce Association got a rate increase of 59 percent for its seven employees working in an office environment. While no hard data is available on state-wide rate hikes, one employer lobbying firm says the average increase has been 23 percent in the last year. However, the insurance carriers say their rates only rise if businesses are deemed higher risk environments.

If you’re a business owner, what has been your experience with workers’ compensation premiums? What factors are causing the hikes? Is this the new normal for premiums? Or could the effects of 863 bring the rates back down?


Stuart Waldman, CEO, Valley Industry and Commerce Association – a non-profit representing businesses in the San Fernando Valley

Pete Moraga, Spokesman, Insurance Information Network of California – an insurance industry association

Brad Chalk, Legislative Director, California Applicants’ Attorneys Association

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