Author, Greg Garcia, Account Executive, Rancho Mesa Insurance Services, Inc.
In September 2022, the Workers’ Compensation Insurance Rating Bureau (WCIRB) recommended a 9% increase in the pure premium rate for landscape class code 0042. Effective September of 2023, a 4% increase was recently approved, totaling 13% over the two-year span.
Pure Premium Rates arise from losses sustained and payroll submitted to the WCIRB from all workers’ compensation insurance companies. Per the California Department of Insurance (CDI), “Pure Premium Rates” are defined as “the cost of workers' compensation benefits and the expense to provide those benefits.” The WCIRB evaluates each individual class code and determines what the recommended rates will be for the upcoming year. This recommendation is made to the CDI who ultimately needs to reject or approve the recommendation. Once the pure premium rates are approved, each workers’ compensation insurance carrier will apply their individual least common multiple (LCM) which is an adjustment to the pure premium rate that takes into consideration business expenses and profit for the carrier, thus creating their individual base rates for each class code.
What does this all mean? The claim activity and claim cost as a whole have been increasing over the last two years for landscapes companies in California. This may signal the beginning of a hardening workers’ compensation market resulting in higher premium cost.
What can be done to help combat these potential increases in premium? An increased attention to safety practices to reduce claims, a robust return to work program to mitigate cost of existing claims, proactive claim management, and consistent, documented safety training are a few of the ways that will help a landscape business remain best in class.
Take control of your future costs and look to your existing risk management partners to help you accomplish your goals. For Rancho Mesa landscape clients, we do this through our customized and proprietary programs and tools, including:
Key Performance Indicator (KPI) for workers’ compensation
These pure premium changes will take place on workers’ compensation insurance renewals after September of this year. Don’t be caught by surprise or unprepared. We are here to help you proactively navigate through this. If you have any questions, want to learn more about our programs and tools, please feel free to reach out to me at ggarcia@ranchomesa.com or 619-438-6905.