Carrier Landscape for California Workers Comp

California is both boon and antagonist to business with its dynamic workforce but occasionally oppressive regulation. The State's Worker's Comp marketplace reflects this duality as well.  California attracted many private carriers in addition to the State Fund but the marketplace was nearly thrown into a tailspin with many carriers leaving the market altogether or threatening to under the unintended effects of regulation and laxed disability policy.  Subsequently, regulation under Schwarzenegger worked to save the marketplace and reverse some of the excesses that existed.  The net effect is our California Worker's Comp marketplace that we have today which quite a bit more stable and price effective albeit, still fairly regulated.  Let's take a look at the California Worker's Comp carriers that make up today's marketplace for businesses.

California's Worker's Comp carrier landscape actually employs a hybrid model with a public entity (State Fund) providing guaranteed issue coverage at a higher rate (to be expected) and private carriers offering more attractive pricing but with underwriting.  This private marketplace with a back-drop of public guaranteed issue coverage (of last resort) is a pretty stable model and likely what we'll see in other marketplaces like individual/family health insurance going forward.  So let's start with State Fund.  State Fund is generally used for start-ups or company with more risky business profiles and or claims history.  In most situations (we can determine if it's yours or not), a new company or a company in a riskier business will have to go with California State Fund for worker's comp coverage.  Once we have some claims history or stable risk over a period of time, we can then look at the private carriers on the market to try and get a better rate.  Worker's Comp contracts in California 12 month contracts so we can investigate possible options when the renewal comes around.

On the private market for California Worker's Comp, you have many competing private carriers.  These carriers tend to focus on property and casualty coverage.  You don't have a lot of health insurance although there is benefit to combining group health and worker's comp coverage which we discuss in a separate article.  Currently, we like to focus on Traveller's, Employer's in addition to State Fund when a company might qualify for private coverage.  Travellers and Employers have been very competitive in their pricing and pragmatic in their underwriting and claims processing.  If we are able to qualify based on underwriting, these two carriers are solid lead ins.  We are independent California Worker's Comp brokers so we can also quote ACE Group, Zurich, and the Hartford which are all strong carriers.  Each carrier has peculiarities in pricing depending on size of premium, type of business, etc so there is no one sure fire obvious candidate till we run the quote with the carriers and actually see the offer.  Since the core benefit is standardized (a certain amount of protection per incident etc), pricing and ease of doing business with the carriers is critical.  From our experience, Employers and Travellers offer the best cost to benefit comparison on the market for most situations but as independent brokers, we are can quote according to your company's demographic make-up. 

The California's Workers Comp marketplace is relatively calm now (knock on wood) and the dominant carriers look to be a good financial and legislative position to continue offering the best pricing for coverage to California businesses.  You can complete the 10 minute Quick From and and we'll start to quote these carriers for you.

Related Pages:

California State Fund introduction
Different approaches to Workers Comp coverage


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