Workers' Compensation Results

Monday, April 26, 2010 | 0

By Scott Hauge
Small Business California

The Workers' Compensation Insurance Rating Bureau released April 14 the summary of insurer experience for 2009. The total written premium was $8.9 billion, down from $10.7 billion for 2008. The average rate per $100 of payroll was down slightly from $2.37 to $2.35. This is down 63% from 2003. The accident year loss ratio was 75%, up 6% from 2008. The combined loss ratio was not reported but in 2008 it was 108% and the estimate is that it will be around 120%.

So you are asking what does this mean. The pressure is on to increase rates and at some point they will go up double digits but I do not see it happening this year but look out for January. There will most likely be some increase in pricing but I do not see any dramatic increases this year. The caveat here is that some companies may increase premiums by double-digit amounts but most won’t. State Fund is one of those companies you will see double-digit increases.

The Senate passed an extension of several of the American Recovery and Reinvestment Act provisions that were set to expire April 30. These provisions include the higher guarantees for Small Business Administration 7a loans and fee waivers for 7a (working capital and some real estate) and 504 loans (real estate). The extension provides $80 million to extend these provisions until May 31.

While this is clearly good news what we need is passage of S2869 which will extend these provisions to the end of the year and increase the loan size to $5 million and allow refinancing of 504 loans.

The other day I was talking to a labor attorney and asked him what he was seeing in the way of litigation against businesses. His answer was that there has been an explosion of lawsuits for wage and hour violations. I strongly recommend you talk to your insurance broker about coverage for employment practices liability. This coverage also provides for wrongful termination, sexual harassment and discrimination along with some third party liability like the Americans with Disabilities Act. Be sure to ask your broker about wage and hour and ADA as some Employment Practices policies do not automatically cover this.

Scott Hauge is president of the Small Business California advocacy group and owner of Cal Insurance & Associates in San Francisco. This column was reprinted with his permission from his blog, which can be found here: http://smallbusinesscalifornia3.blogspot.com/