Success Soars with SafetyOne™: Improve Workplace Safety and Lower Costs

Author, Jadyn Brandt, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

In today’s complex insurance environment, workplace safety is not just a regulatory requirement, it’s a necessary strategy to keep employees safe and costs low.

Rancho Mesa’s SafetyOne™ platform is transforming how businesses train their employees, providing access to proactive risk management tools that can improve compliance, reduce incidents, and lower expenses.

In a recent analysis of client data, Rancho Mesa found that clients who are frequent SafetyOne users see, on average, significant decreases in their X-MOD, incident frequency rate, and indemnity rate.

For clients who were shown to be active users of Toolbox Talks over a three-year period:

• Average X-MOD has decreased by 14%

• Average Frequency Rate Percent has decreased by 27%

• Average Indemnity Rate Percent has decreased by 4%

These impressive results can be attributed in-part to a consistent emphasis on workplace safety, strengthened by the tools that Rancho Mesa provides to our clients.

Toolbox talks are an excellent resource to ensure your team is equipped to handle all jobsite responsibilities safely and respond to unsafe situations. They can be used as weekly safety trainings or to correct unsafe actions observed on a jobsite.

Rancho Mesa’s vast library of toolbox talks includes general industry trainings as well as industry-specific content for landscapers, tree care companies, and company drivers.

Subscribe to receive Rancho Mesa’s weekly toolbox talk emails for your industry.

Navigating the Hard Market in Tree Care Insurance: What Business Owners Need to Know

Author, Rory Anderson, Partner, Account Executive, Rancho Mesa Insurance Services, Inc.

The tree care industry has always carried a unique set of risks, but in today’s insurance climate, business owners are facing challenges unlike anything they have seen before. What used to be a straightforward cost of doing business has evolved into one of the more complex and expensive aspects of running a company. Nearly every major coverage line is feeling rate pressure, stricter underwriting standards, and fewer carriers willing to take on the exposure.

This environment is what the industry calls a hard market. Knowing why this is happening and how it impacts your business is essential to navigating it successfully.

Auto: The Leading Cost Driver

Commercial auto has become the biggest pain point in insurance programs for tree care companies. Premiums are rising sharply due to:

• Vehicle costs - new trucks, parts, and repair expenses have jumped significantly

• Medical bills - post-accident treatment continues to escalate year after year

• Nuclear verdicts - jury awards in the millions, even for relatively routine accidents, have made insurers more cautious and aggressive with rate adjustments.

In response, many carriers are raising rates substantially and, in some cases, reducing coverage. For contractors that rely heavily on vehicles, this is creating major financial strain.

General Liability: The Long Tail of Claims

Tree care companies are also feeling pressure on general liability coverage. Carriers are dealing with:

• Rising medical costs for bodily injury claims

• Inflated property damage payouts as materials and labor costs climb

• Claims that appear years after work is completed. For example, if a company trims a tree and years later a storm brings it down, liability may still trace back to the original contractor.

These realities have not only led carriers to raise premiums, but also scrutinize operations more closely, sometimes declining to offer quotes on accounts they would have considered in the past.

Umbrella: Following the Trend

Because umbrella liability sits directly on top of auto and general liability policies, the pricing inevitably follows those trends. As underlying rates climb, umbrella coverage has become more expensive, and carriers are regularly reducing limits. This makes it difficult for companies to secure the higher levels of protection they need.

Workers’ Compensation: No Longer a Safe Haven

For years, workers’ compensation provided a soft landing spot in an otherwise tough market. That has changed.

The 2025 pure premium for class code 0106 (tree care) has increased 12% from $9.91 to $11.24. Pure premium is the baseline rate set by the state that reflects the expected cost of claims for a given class code, before carrier expenses, fees, and profit are added.

The primary drivers of this increase are rising medical costs, a surge in cumulative trauma claims, and higher wages which increase claim payouts since lost wages are a core part of workers’ compensation benefits.

Tree care companies that once relied on stable workers’ compensation programs are now seeing noticeable increases on this critical line of coverage.

Positioning Your Company for Success

While companies cannot control market cycles, they can influence how carriers view their risk. Strategies include:

• Strengthening safety programs - documented safety practices lower both claim frequency and severity.

• Prioritizing fleet management - clean driving records, ongoing training, and telematics can make your auto risk more attractive.

• Start early - the more lead time your broker has, the more leverage you will have with carriers.

• Choose a specialist - generalist brokers often miss industry nuances. A broker who understands tree care can align your program with carriers who know the risks.

The hard market is reshaping how insurance works for tree care companies. Rising rates and limited capacity are real challenges, but businesses that invest in safety, plan ahead, and partner with knowledgeable advisors can still secure strong and competitive programs. Now is the time to approach insurance with a proactive, not reactive, strategy.

For assistance navigating the hard market, contact me at randerson@ranchomesa.com or (619) 486-6437.

Using Rancho Mesa Resources for Return-to-Work Programs

Author, Jadyn Brandt, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

Avoiding injuries on the job should be every employers goal but despite their best efforts, injuries can still happen. If an employee’s ability to work is limited for an extended amount of time, that employee could be at risk of leaving their job or dropping out of the labor force entirely. Return-to-work programs are essential in managing the impact of work-related injuries or illnesses, and to help your employees successfully reintegrate to the workplace.

In addition to reducing the number of weeks an employee is not performing their normal job duties, developing a return-to-work program can be a cost-saving tool for employers by lowering workers’ compensation costs and eliminating the need for a new or temporary hire. An effective return-to-work program will allow an injured employee to recover, while supporting continued productivity through modified duties.

Timely Reporting of On-the-Job Injuries

The first step of ensuring an employee can safely return to work after an injury is making certain the employee receives proper and timely medical treatment. When an injury or illness occurs on the job, having clear and up-to-date policies is a necessity.

A sample Injury and Accident Response and Reporting Policy is available on Rancho Mesa’s RM365 HRAdvantage™ portal.

You may also be required to log the injury or illness in your OSHA 300 and 301 logs. Recording of OSHA logs are also available within the RM365 HRAdvantage portal. Additional information regarding OSHA log requirements can be found on the Rancho Mesa website.

Returning to Work Safely

When an employee is ready to return to work, a Release and Return to Work Acknowledgement letter should be provided to the returning employee that outlines their modified duties and accommodations. A template is available through the RM365 HRAdvantage portal.

An employee may be required to perform modified or reduced duties while preparing to return to their normal job. It is up to the employer to decide what tasks to assign an employee. Temporarily working for a non-profit organization, or completing online safety training can be used as a task or transitional step towards getting the employee back to their normal job duties.

Rancho Mesa provides two extensive libraries of safety and professional development trainings that can be useful in a return-to-work program. These safety trainings can be accessed through the SafetyOne platform, while the professional development trainings are located in the RM365 HRAdvantage portal.

For questions regarding Rancho Mesa’s resources for return-to-work programs, contact your Client Technology team member.

Protecting the Organization and Employees When Offering Retirement Plans

Author, Sam Brown, Vice President, Human Services Group, Rancho Mesa Insurance Services, Inc.

In this competitive labor market, employers may offer ERISA (Employee Retirement Income Security Act of 1974) compliant retirement plans to draw and retain a talented workforce. It makes sense; data shows that retirement benefits reduce turnover, build employee trust, and offer predictable retirement savings.

Exposure to Liability

While an ERISA plan offers many benefits to an organization, savvy leaders understand U.S. labor code exposes employers to significant liabilities. This liability is due to the strict fiduciary duties the law requires of plan sponsors and fiduciaries. Under ERISA, a plan fiduciary is any person:

1. Exercising discretionary control or authority over plan management or administration,

2. Exercising any authority or control over the management or disposition of plan assets,

3. Rendering investment advice for a fee or other compensation.

According to the U.S. Department of Labor (DOL), within a leadership framework, fiduciaries may include plan trustees, plan administrators, members of an investment committee, investment managers, and corporate officers with plan oversight.

In addition, fiduciaries who do not follow established principles of conduct may be personally liable to restore any losses to the plan following a breach of fiduciary duty.

A complaint of a breach of fiduciary duty may allege imprudent investment choices, excessive fees, lack of investment diversity, poorly selected service providers, or failure to follow plan documents.

Addressing Exposures

Critical to the ERISA plan discussion is securing insurance to protect the organization, plan assets, and individual fiduciaries in the event of a claim or lawsuit from plan participants. An employer can accomplish this with two lines of insurance coverage.

To protect the ERISA plan’s assets and employee investments, crime insurance policies typically offer ERISA fidelity coverage. This will pay the insured for direct loss of money and securities belonging to an employee benefit plan caused by theft or forgery committed by a fiduciary. Minimum required limits are generally 10% of the plan assets with a $500,000 maximum. Limits can exceed $500,000 with underwriting approval. Additional information on ERISA bonds can be found on the DOL website.  

To protect the organization and individual fiduciaries against actual or alleged breach of responsibilities, employers would be wise to secure fiduciary liability insurance coverage. In the event of a claim, lawsuit, or government investigation the policy will pay on behalf of the insured all costs of defense and damages up to the limit of liability. It is important to remember the policy will not protect against intentional wrongdoing and does not cover claims against outside service providers.

As employers strive to attract and retain talent, ERISA plans may give organizational leadership a competitive edge in a tight labor market. In doing so, employers should understand and address exposures to liability. An experienced insurance professional will offer guidance and education when seeking the proper protections.

Please contact me at sbrown@ranchomesa.com to discuss these and other risk transfer solutions.

Training Your Team for Safer Driving This Fall

Author, Jadyn Brandt, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

Summer break is coming to a close and as students return to the classroom, drivers can expect an influx of cars on the road.

Whether you’re dropping the kids off at school or operating a commercial vehicle, busier commutes mean more risk. Safe driving should always be a priority, but with more people rushing to their destinations, this is a time to be extra vigilant behind the wheel. Drivers will likely encounter more school busses, cyclists, pedestrians, and teenage drivers still getting the hang of operating a vehicle than in the summer months, which can pose additional hazards.

Unsafe driving practices can lead to property damage, injury, or even death. The National Highway Traffic Safety Administration (NHTSA) reports the rate of fatal crashes and crashes which resulted in injury in 2023 peaked in the months of September and October. Plus, with auto rates on the rise, on-the-job accidents can cause premiums to skyrocket. And for employees, a history of auto accidents on your personal driving record can hinder your chances of being hired for roles that include driving as part of the job.

To keep drivers safe and insurance premiums low, employers should take time to train employees on safe driving practices and highlight potential hazards they might encounter on the road.

Rancho Mesa’s SafetyOne™ platform offers a variety of safety resources including online training courses and a library of 52 driver-specific toolbox talks, in both English and Spanish. These trainings can be used as weekly safety refreshers, or to help correct specific unsafe actions. If you want to address the increase in traffic during the fall months, Rancho Mesa recommends these toolbox talks:

• Awareness of Pedestrian and Vehicle Traffic for Company Drivers

• Avoiding Distracted Driving for Company Drivers

• Handling Aggressive Drivers for Company Drivers

• Managing Following Distance for Company Drivers

• Right-of-Way Rules for Company Drivers

• School Zone Awareness for Company Drivers

• Sharing the Road with Cyclists & Pedestrians for Company Drivers

• Understanding Blind Spots for Company Drivers

To receive weekly driver-specific toolbox talks directly to your inbox, subscribe to Rancho Mesa’s free weekly Driver Safety newsletter.

The History, Importance and Value of Surety Bond Requirements for Contractors

Author, Anne Wright, Surety Relationship Executive, Rancho Mesa Insurance Services, Inc.

Surety bonds, in the world of construction, guarantee that the obligations of the contract will be properly completed and all costs paid.

The concept of surety – which is a guarantee of one party for another party’s debts or obligations – literally goes back to ancient times. Whether the story you might find is a farmer in Mesopotamia in 2750 BC promising that another farmer will deliver on their obligation – or more recently (1600s) a guarantee that a ship would safely arrive at its cross-ocean destination with the goods promised – civilizations have long realized that an instrument of protection was important to ensure something was delivered as promised.

Here in the US, Congress passed the Heard Act in 1894 requiring surety bonds to guarantee completion of any projects funded with federal dollars. This was revisited and updated in 1935, under the Miller Act, which you may have heard of. Today’s federal requirements require a form of surety guarantee (i.e., corporate or individual surety bonds) for any construction projects over $150,000.

Individual public agencies (e.g., states, cities, universities, school districts, etc.) set their own guidelines for bonding thresholds. These have been referred to as “Little Miller Acts” for the local jurisdictions.

When it comes to private construction projects, it is not mandated by law but, rather, determined by an owner or often a lending institution whether they want a guarantee from the general contractor to the project owner. This serves as a form of insurance that guarantees job completion and payment of all associated costs, thereby ensuring the project is finished without any liens.

The surety process itself is a useful tool for owners, general contractors, and contractors needing bonds in order to be considered a good risk.  Which means they have proper processes in place to ensure a productive and, in the end, profitable project.

The processes that are typically needed for a contractor to get the best support, and often rate, from their surety relationship, all serve the contractor well in their overall business, too.

The process might be seen as a prequalification of a contractor’s ability to perform, but it also can set a contractor apart from competition who cannot claim to be bondable.

To some, the surety processes (e.g., producing trackable financial information, perhaps annual financials prepared by a CPA, getting a bank relationship in place for a line of credit, etc.) may seem to be an extra burden for some business owners, a benefit to the contractor is that it provides the business owner with certain accountability tools to make sure their jobs are managed properly, and accounted for properly, and allow them to see their businesses flourish. This is a tangible value to the contractor, and we, as surety professionals, appreciate being able to facilitate these processes and witness that success.

While you can see that the history of suretyship really started to protect the owner’s dollars at stake in the project, it has also served construction companies well to help them manage their business and related performance indicators.

To see how Rancho Mesa can assist with your surety needs, contact me at awright@ranchomesa.com or (619) 486-6570.

Navigating Risk A Holistic Approach to Mechanical Trades Safety with UFG

Account Executive Matt Gorham sits down with Gary Clevenger, VP of Risk Control at UFG Insurance, to discuss a consultative approach to risk management in the mechanical trades. They cover how a holistic risk assessment, strong partnerships, and modern tools like the DOS framework can elevate your safety and insurance strategies.

Matt Gorham: You're listening to Rancho Mesa's StudioOne™ podcast, where each week we break down complex insurance and safety topics to help your business thrive. I'm your host, Matt Gorham, and I'm joined by Gary Clevenger, Vice President of Risk Control with UFG. Gary, welcome to the show.

Gary Clevenger: Thanks, Matt. Glad I'm here. Appreciate it.

MG: Yep. Happy to have you here. So, you know, Gary, I wanted to start a little bit more about your background to give listeners a chance to understand where you're coming from. Tell us about your history in the mechanical trades and how you made your way to being VP of Risk Control for UFG.

GC: Well like everyone, I didn't start out to be the Vice President of Risk Control, but life will take you down many paths. Way back 25 years ago, I had the opportunity to be the risk manager for a Sheet Metal Contractor Association, SMACNA. So inside of that role, I got to be exposed to the mechanical trades, the roofing trades, they all, all the artisan contractors, and they all seemed to intertwine, and I would see them on projects. So I went to work for an international carrier, and in that space, I was able to work on programs related to the mechanical trades and the sheet metal trades. So Mechanical Contractors Association, state and local chapters, also got to work with some of the largest mechanical contractors in the U.S. and world, quite frankly. So just had a lot of exposure to the mechanicals and the sheet metals and took that experience and knowledge over the years and just expanded it as I went and really just find it as an area that I have a lot of interest in, a lot of experience with and something I'm passionate about is making sure that they continue to improve and that continues that improvement mantra within that group.

MG: It's fantastic. I mean, exhaustive, if not, you know, extensive certainly, which seems like it would give you a really unique perspective to approach the mechanical trades in particular and artisan trades more broadly, but mechanical trades, which would just give you some really valuable insights to how the mechanical trades operate and where you can provide more value to them in strengthening their safety program.

GC: Yeah, no, you're exactly right. We got to see so many different contractors' different ways of doing business, the good, bad, and the ugly, if you will. But with that, you know, you also had a chance to really learn and take what's good from many different contractors and bring it together to say, "What would the perfect mechanical contractor look like if you could put one together, like the 6-million-dollar man back in the day. What's that contractor look like?”

And there's a lot of commonalities. And so take the best out of those and bring that to the table for them to review and see where they can plug it into their operations.

MG: Yeah, that's fantastic. And now you've told me that UFG's approach to risk assessment, it's not traditional, but more of a service designed to support contractors. What do you mean by that?

GC: So I'm glad you asked you know, the old term transactional versus conversational or consultative. So, the old way of doing risk control seemed to be transactional. You would go out, have a conversation, do the quasi-inspection checklist, and, you know, get your information and go. We're really striving to be consultative, have the conversation, get to know the customer, find out their pain points, you know, look at the threat landscape, a holistic risk management type approach. So really trying to dig deeper into everything from their workforce resiliency to their processes, their process flow, what exposure they have in a given market or within the artisan trades, they are specialty. So if they're doing data centers, how can we help versus maybe service or a new install? So a lot of different components to it, but really trying to be consultative is a nice term in doing a total risk assessment with a holistic approach.

MG: Yeah, you just mentioned a phrase that, you know, when we first spoke really stuck out to me and you use it here again, just so fluently: risk landscape. Where do you first encounter that concept and how does that guide your team's work?

GC: Well, it wasn't a—when I say the concept, you know we coined the phrase the threat landscape or the risk landscape because it is holistic. You know, you can focus on safety or you can focus on compliance or the insurance side, but really they all dovetail together. So making sure that the contractor is aware that, you know, what they do on a job site that may cause a work comp claim can also impact them on the general liability side or that, hey, what penetrates the umbrella the most are auto accidents. So are you taking care of your drivers? That contractors in place, their job is to, is to build a constructor or install something, not manage risk or not manage that driver or do that driver training. So we're really trying to help them with those pain points and those threat landscapes out there, whether it be workforce resiliency or, you know, process flow, just the various ways you can engage with them to help them make their businesses better that continuous improvement mantra.

MG: Yeah, and I appreciate that you recognize that, right? their responsibility is building, constructing. That's their primary focus is running their business so they can deliver on the projects and the commitments that they've taken on. And you've also mentioned a couple of times a holistic, consultative process to risk management and the way that you guys are able to work alongside policyholders. How important is it to get collaboration from policyholders and from agency partners to deliver on your objectives and why should policyholders want risk control involved?

GC: Those are great questions. A risk assessment is essentially that opportunity to have an outside individual come in and just give you an assessment of your operations. You have threats to your business, you have safety, you have compliance, you have payroll, you have your workforce, you've got a procurement, you have so many things going on. So having a risk consultant come in or a risk assessment completed by risk control representative, along with the agent, you know, really is valuable or should be a value. That's that value add opportunity to say, Hey, we see hundreds of mechanical contractors or artisan contractors in a given year, let us help you with some of the intelligence we've learned from others and help you plug that into your business where it makes sense. Again, it's not a one-size-fits-all. It's really a, we call it a white glove service or boutique type service. It's like really trying to find, “Hey, where can we make the biggest impact and help you get better and then how does it build upon a stuff? How does it stair step or how can you ladder that into the next success?”

MG: Yeah, you shared with me that there are different areas that you guys will focus on. You just mentioned, of course, that auto being the area that's most likely to lead to an excess loss or an umbrella loss, and there are, again, these different areas that you have the ability to look at risk control and controls from different mechanical contractors and bring them together to support other policy holders. Can you speak a little bit about just some of the different areas that you're looking at, whether that be auto or whether that be work comp when you are doing a risk control survey?

GC: No, that's a great question as well. We broke it down into what I would call minimum standards. So it's really three categories. They focus on fleet and your equipment. They focus on general liability and they focus on workers' compensation. Then inside of those, there's just a number of items that really, if you have those in place, you will be successful. And this is from years of looking at Mechanicals and finding those who are successful and in most cases, what did they have in place that allowed them to protect their company, protect their assets? Everything from driver training, employee training, you know, how did they maintain their vehicles? Did they have subcontractor pre-qualification in place? Do they have the right contracts? Did they have a construction defect or product liability concern? What does their completed operations look like, you know, wellness programs, PPE, is it appropriate for the job? You know, safety training, safety programs, the whole gamut, all broken down together. And it's something that works well. It allows the contractor really more-or-less to do a quick gauge of how they stack up to peer companies across the country, quite frankly.

MG: That's awesome. And one of the things that comes to mind for me is you're talking about the different controls in the different areas here. You've also shared with me a DOS assessment. Walk me through that?

GC: So a DOS is a dangers and opportunities and strengths. It's very similar to a SWOT analysis or a 3P or a Lean Construction or a Kaizen. You think of all those different terms, but DOS, I've landed on that. It's very simple. It's dangers, opportunities and strengths. So just ask an owner or a risk manager what, in your organization, what do you see as your number one danger, your biggest opportunity and strengths? Sometimes they can all be the same.

A good example is that UFG, my risk control group, they're outstanding professionals and that's our greatest strength. They're also very tenured. That could also be a danger because they're, because of their tenure and their level of expertise, technical knowledge, others are trying to poach them or they may be getting close to retirement. It is an opportunity as well because we can lean into that high level of expertise and bring that to the customer and bring it a different level than just the basic risk control compliance type services really going deep in that white glove approach that we talked about earlier.

So, dangers, opportunities, and strengths, an easy one. You can do it in a lot of different scenarios. You can do it by line of coverage. You can do it by job. You can just do it by a company holistically. Think of that threat landscape that all these companies have in front of them and what does that you know reputational risk look like? So what's the threat to your reputation if you've got a great workforce that's healthy and is you know getting the hours they need and not getting hurt, you know, you're going to look a lot different than a company that's pulling up with trucks with dents on them and employees with bandages on their hand or beat up PPE, you know, that's that reputation risk we talk about so a lot of different pieces there inside of the DOS that you can go a lot of paths you can use it for.

MG: Yeah I like the fact that you point out that you could have one factor be both a danger and a strength

GC: Yes.

MG: It really depends on how you want to apply it and approach it and in protecting yourself, but also being able to provide what that benefit is to your policyholders or for you know our listeners for their businesses; how do to leverage the assets that they have and retain them effectively.

GC: Yeah, I would challenge anybody just to do the exercise yourself just in your head. You know, get or sit down with your team and you know, “Let's go through our dangers, opportunities and strength as an organization and what are they in it?”

And it'll be interesting, your frontline supervisor may have something different than your field leadership versus your, you know, the back room support. So it, everybody's going to have a different danger, opportunity and strength, but holistically bring them all together you'll make you a stronger organization

MG: Yeah, you brought something up that I think is really interesting is who do you would involve in that conversation and it seems like as risk managers it's a conversation that we should be having with our policy holders.

GC: Yes. No, that's a great point. It's really the risk manager the owner of the principles obviously all should be engaged. But the risk manager that's their job inherently the title of you know and just because you're called the risk manager, you may have 16 other hats you wear, but at some point your responsibility is managing the risk of the company. That could be the owner. That could be a designated individual. It could be a committee, but they would be a great exercise. Whoever's in charge of the risk mitigation to try the DOS.

MG: Really good point. I'm curious then, and there may not be a universal answer to this, but curious to hear your thoughts. How often should policyholders be in contact with a risk control consultant?

GC: Oh, that's a great question. So it's interesting, there's some customers that, you know, really two or three visits just really close together where you try to drive home a process or you need some help immediately. And then from there, it's as needed. Whereas others, it's like, I'm more of the approach of, let's make this a two or three-year service strategy. We're not going to get it all done in nine months or six months. Let's string this out. It must be realistic with it. What can we fix or work on? What can we bring to the table that is digestible? And then where can we go throughout the process? Where do you want to be is as a step, we want to go from A to B to C; how do we get there?

So really having a plan and understanding that you have that resource available. If you have an immediate question, “We're going on a job site, we've got crane setup, we don't know if their cribbing is right,” you know, we'll get you on FaceTime, let's use a virtual platform, let's look at it together. We can solve it. Versus, Hey I really need a new fleet safety program that incorporates telematics and, you know, external facing cameras. And I also need to, I'm concerned about negligent trust so I need to work on that type of a policy.”

So it varies depending on the customer and where they're at in their maturity level.

MG: Yeah, there's a lot of really good points in there. You know, one of them is the prioritization element, you know, and breaking things down into a digestible amount and a process that can be implemented on what's most important, what's most pressing, and also meeting policy holders where they are, with what they can practically implement.

And so, Gary, what are some less commonly known areas that risk control can provide support on?

GC: Most risk control professionals and in UFG, they're very broad in their experience and their technical expertise. And so what we've done is we've laid out a very diverse group of professionals, but we also have a diverse group of service offerings. So it may be initially we need compliance training to get us on a job. And then from there, “Hey, how do we bring our accident rates down so we can continue to get these jobs?”

And so to the point of a company may have contracts issues or they've got bad risk transfer in place. Not say bad, but it's lacking a component that could be stronger. Or, hey, really to button down the risk, they should really look at, you know, what kind of site controls do they have in place for subcontractors or what kind of, you know, pre-qualification you have for subcontractors. So the subcontractor pre-qual is a big piece of it, making sure they understand their insurance exclusions and personal use policies, whatever the case may be.

So there's that component of it, but then you also get into we can do training, training can be virtual, it can be on site. There's other resources. We have an ecosystem of vendors called United Vendor Network. These are vendors that do things, everything from telematics to confined space training to safety type training to industrial hygiene, to drug and alcohol testing and helping you write those programs, you know, so you can take in that force multiplier track approach in an ecosystem where maybe they need to tap into one of those to add value to their company or they're lacking that expertise. So it is very diverse in what most risk control can bring to the table.

And I think, I think the fallacy is that it's just an inspection. It should never be just an inspection that risk assessment term is what you should be hearing from most professionals and that's what it is it's an assessment of your risk. What's your threat landscape look like and then what maybe solutions or suggestions can we provide.

MG: Yeah which is fantastic because it—again it's less about bringing somebody out to tell on you right or having them tell on themselves.

GC: That's not the intent, yeah. That's a great, that's not, it's not a “gotcha” moment by any means no it's like, “Hey, tell us what you're doing, show us what you're doing.”

And then we may ask you more questions because we want to learn more because, “Hey, this is the best we've seen,” or it may be, “This is good, but if you want to go to the next step, this is what another company did that would help you tweak it a bit. And, you know, that process improvement could be implemented.”

MG: You also mentioned technology and the ways that we can connect now virtually or the library of resources that's available, where it's not simply a matter of having a schedule time face-to-face or walking around with a clipboard and a checklist, where you can get a lot more out of working with your risk control advisor, with your carrier partner than you could in years past.

I know where ergonomics training is an area that's getting a lot of attention, being able to use predictive modeling to see where injuries are going to take place or where damage is likely to be caused. So it seems like there's a different focus, there's a different approach, but technology is really helping your team develop a philosophy that's working more with policyholders in a consultative approach, rather then, again, a “gotcha” type moment.

GC: Yes, no, then I think the term we like to use is how can we be present? We want to be present with our customer. And you can't always be present in person just because of a variety of logistics that make them into place. So we've stood up a virtual platform and our virtual platform is FaceTime type technology. It's agnostic to any device. So we could talk to an owner in Ohio looking at a job site in Florida and a second job site in Arizona, all in the same in the same afternoon, and really have some great interactions.

If you think about the construction industry, you can go on a job site and see what you need to see via a FaceTime-type video and really be able to provide some valuable insights. As well as training, you can do training virtually. You can do training on-site. You can do training via the various platforms that are out there, the learning management systems that are out there. We have all those as well. Companies should take advantage of that of every one of those if they can. On-site’s great, virtual is good, learning management-type system training, it hits the mark it keeps the training documentation for you they're really well done nowadays so it's just an ever-evolving industry.

You know as well as I do everyone has a cell phone they have a smartphone we look at reels we look at clips we're on FaceTime we're on the various sites often so the more we can incorporate that in along with the technology in the vehicles from the telematics to the cameras to the, you know, cell blocking technology. There are so many ways technologies can be integrated. Now you can overwhelm yourself with that too and you have to be a little bit choosy so you don't just spend money to spend money. But in a lot of cases it's becoming table stakes.

MG: Absolutely. And like you mentioned, everybody has everybody has a cell phone. We've been able to leverage proprietary software here, SafetyOne, that has things like your tailgate topics to be able to make it accessible for people regardless of where they are in the field, but also digital record keeping, have it centralized.

So just helping to bring our clients into the 21st century and making sure that not only is the training being done, but there's continuous record of it to make things easier. And I imagine it's the same philosophy that you guys have followed of accessibility one, but also the follow-up that comes with it to ensure that people are getting something out of it and there's documentation that supports it.

GC: Yeah, I know to your point that the collateral and the resources that Rancho Mesa has are outstanding. They're, they're cutting edge top, you know, state-of-the-art, having that available to customers just brings more opportunities to be successful. Same with your carrier. So if you take your UFG and you marry that up with a Rancho Mesa, all the various technologies available, you can really have a robust platform, maybe more than you need, but you pick and choose what fits and then work with your producer, your agent, and your risk control consultant on building out a plan to implement and engage over time and be present with your customers, be present with your employees and really allows you to have a robust risk management platform that mitigates risks and really is thoughtful also in that process.

MG: Yeah, I appreciate that. And yeah, I really like the way that you've introduced presence within it, you know, especially in relation to the, you know, the DOS analysis of being able to introduce everybody to it, have presence, an ongoing presence and prioritization. When you bring these elements together, it can really impact the risk control of the business to allow them to focus on, again, what, like you said, their job is, it's building, it's construction, rather than having to worry about losing guys in the field or really dealing with the damage, the fallout of when things go wrong. You've continued to amaze with what you have to share, and I know that I'm going to continue to learn from you, just giving your vast experience and everything. Any other wisdom that you want to share with us before we wrap up?

GC: Partner with your insurance partners, partner with your carrier, partner with your producer and your agent at Rancho Mesa because you've got a lot of collaboration and a lot of expertise available to you. Don't be afraid to use it, that's what we're here for and it will really make the industry better as a whole, but also will improve your business, is a good way to look at it.

MG: Fantastic. I'm going to call it wisdom because the reality is insurance is, it's a difficult product for a lot of people to really wrap their head around because it's not tangible. It's not something you can touch and feel and it's feels like it's the same for a lot until you need it. But the reality is with carriers that are looking to invest in businesses, there's a lot more that they can bring to the table. And you don't have to wait till something goes wrong to find out what that value is.

GC: No, you're really looking for that partner that partnership and it and it grows across the whole spectrum that partnership so that's what you're looking for. Someone told me years ago, and I think it's appropriate for when we talk about mechanical contractors and such said, you know, “You can have a house and you can have a home you know so your insurance is a little bit like the HVAC system in your house; you don't have to have it, but it will make you a lot more comfortable with it.”

MG: Yeah, that's a good point. So, Gary, thanks for joining me in StudioOne. I really enjoyed getting to hear what you had to say, and just looking forward to continuing the conversation.

GC: Oh, thank you, it was great. I appreciate it, and I look forward to the next time.

MG: Thanks for tuning in to our latest episode produced by StudioOne. If you enjoyed what you heard, please share this episode and subscribe. For more insights like this, visit us at RanchoMesa.com and subscribe to our weekly newsletter.

Staying Compliant: Updating Your Human Resources Policies

Author, Jadyn Brandt, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

In today’s rapidly changing legal landscape, it is more important than ever to ensure your company’s policies and procedures are kept up-to-date.

Updating your employee handbook is a vital step in ensuring employees are aware of new policies and understand what is expected of them.

A yearly review of your company handbook is recommended, in order to prevent a lapse in compliance. In order to streamline this process, Rancho Mesa’s RM365 HRAdvantage™ portal provides important law updates at both the state and federal level. Additionally, if you choose to build your company handbook through the HR Portal, updates to your policies will be automatically be suggested to reflect any new laws or requirements.

If you are actively reviewing your company policies or simply want to get a head start on next year’s policy changes, login to the HR portal to get your state-specific requirements. Below are a few notable California law updates:

1. California Minimum Wage Increases for 2026

On January 1, 2026 the standard state minimum wage will increase to $16.90 per hour. The minimum salary threshold for exempt employees will also increase to $70,304 per year.

Employers who fall under local or industry-specific minimum wages that are higher must comply with those rates.

2. California Publishes Required Victim Leave Notice

A new notice requirement took effect July 1, 2025 as part of California’s expanded victim protection leave law. The California Civil Rights Department (CRD) released a model notice which employers need to provide:

• To new employees upon hire

• To all employees annually

• At any time upon request

• Any time an employee informs the employer that they or their family member is a victim

Employers can also choose to create their own notice provided it meets the requirements of the law.

3. Updated California Regulations Addressing Automated Decision Systems

The California Civil Rights Department (CRD) has updated the Fair Employment and Housing Act (FEHA) regulations on FEHA to employers’ use of an automated decision system (ADS) such as an AI applicant screening tool.

The updated regulations prohibit any discrimination that results from an employer’s use of an ADS or selection criteria—even when performed by a third party system.

The amended regulations apply to employers with five or more employees and will take effect on October 1, 2025.

For questions about how to update your employee handbook in the HR portal, contact your Client Services representative.

Training Your Landscape Fleet Drivers with Rancho Mesa

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

Landscape businesses are well aware of the risks associated with their employees operating vehicles on a daily basis. The commercial insurance market has also taken notice of the risks and responded with rate increases and a diminishing appetite to write the policies. 

Rancho Mesa works with over 100 landscape and tree care professionals across the country. Due to our heavy concentration on the green industry, we are able to bring specific resources to this group in an effort to better prepare their businesses to mitigate risk.

An example of these industry-specific resources is our recently released driver-specific toolbox talk library that can be used on a weekly basis to help employees prepare for the common exposures they face while driving for your company. These short safety meetings should be used to supplement your fleet and driver safety program.

The library of 52 English/Spanish driver-specific toolbox talk topics includes:

• 6 Utility Trailer Driving

• 6 Worksite Parking and Awareness

• 40 General Driver Safety

Safety managers can use this content for:

• Weekly refresher trainings for fleet drivers

• During a specific time of year when there is low light, wet weather, or high wind

• Corrective action from GPS or dashcam insights (e.g., harsh breaking, speed management, following distance, right of way, turning, backing safely, and blind spots)

The library of driver-specific toolbox talks are available within the SafetyOne™ mobile app. And, anyone can subscribe to receive Rancho Mesa’s weekly driver-specific toolbox talk emails.

Rancho Mesa encourages the landscape industry to continuously train their drivers to better position them for success.

For questions about best practices for managing driver risk, contact me at drewgarcia@ranchomesa.com or (619) 937-0200.

Six Ways Contractors Can Prepare for Higher Workers’ Compensation Rates

Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.

Over the last couple of months, we have published multiple articles and podcasts on the Workers’ Compensation Insurance Rating Bureau’s proposed rate increase and now the approved 8.7% increase to the pure premium rates effective 9/1/25. But, what we have not touched on are the specific steps our best-in-class contractors are doing to position their companies to offset these increases. They are:

1. Engaging with their advisor early in the renewal process. Contractors need to know exactly how this rate change will impact their specific class code. For 5506 Street/Road Contractors, the pure premium increase is 5%, but contractors performing dry utility work in class code 6325 Conduit Construction, it is increasing 26%.

2. Continuing to evaluate and update their companies’ risk control program.

3. Understand and managing their historical and future experience modification rate (EMR) . If their EMR is a debit mod (i.e., over 100), determine what is driving it upward?

4. Using KPIs to benchmark their frequency and severity against their peers’.

5. Analyzing both open and closed claims. They are looking for any lag times in claim reporting, and reviewing open claims on a consistent basis to manage open reserves. They identify the root causes of the incident and what they can do to prevent these types of claims from reoccurring in the future.

6. Evaluating alternative risk financing strategies like captives, retros or deductible workers’ compensation plans. 

So the question becomes, why do these best-in-class contractors take these proactive steps? One, they understand that losses unfortunately are inevitable but if there are processes and procedures that they can put in place to minimize the impact, they are willing to do it. The second reason is that they are bidding projects that potentially do not start for another 8-12 months and they want to factor in any increase in operating costs and protect their profitability.

To get started on these six steps to prepare for higher workers’ compensation rates, contact me at sclayton@ranchomesa.com or (619) 937-0167.   

Updates to OSHA Penalty Guidelines and Reductions for Small Businesses

Author, Jadyn Brandt, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

Small businesses are set to be the beneficiaries of new Occupational Safety and Health Administration (OSHA) penalty adjustments.

The U.S. Department of Labor has updated its penalty and debt collection procedures in OSHA’s Field Operations Manual, expanding the number of businesses that fall under small business guidelines.

Under new guidance, businesses across all 50 states who employ up to 25 employees will now be eligible for up to a 70% fine reduction. Previously, that level of penalty reduction was only available for business with 10 or fewer employees.

A penalty reduction of 20% has also been expanded for employers who do not have a history of violations. Businesses who have never undergone inspection by OSHA at a federal or state level, as well as those who have undergone inspection in the last five years but had no “serious, willful, or failure-to-abate violations” are eligible for this reduction.

Additionally, employers who take immediate steps to eliminate a hazard will now be eligible for a 15% penalty reduction.

These policy changes take effect July 14, 2025. Any penalties issued before that date will be held to the previous penalty structure. If your business is part of an open investigation where a penalty has not yet been issued, you will be covered by the new guidance.

Contact your local OSHA office to find our if you company is eligible for these new fine reductions.

The Value of Safety Committees in Human Services Organizations

Author, Jack Marrs, Associate Account Executive, Rancho Mesa Insurance Services, Inc.

Human services organizations operate in challenging environments. Staff regularly work in close contact with individuals who may have physical, cognitive, or behavioral needs. This can involve lifting and transferring clients, managing unpredictable situations, or navigating unfamiliar environments. National data from the Bureau of Labor Statistics (BLS) shows that these situations elevate the risk of workplace injuries.

The BLS data confirms the healthcare and social assistance sector has some of the highest injury rates across all industries, with 4.5 nonfatal cases per 100 full-time workers in 2022. While some risk is unavoidable in this field, many of the most common injuries are preventable and that’s where safety committees can make a powerful impact.

Role of a Safety Committee

Safety committees are internal teams that meet regularly to discuss hazards, evaluate recent injuries and near misses, and implement steps to prevent injuries from happening in the first place. They often bring together staff and management from different departments to proactively create a formal structure for addressing workplace safety.

Organizations with engaged safety committees experience fewer claims, lower insurance costs, and stronger relationships with their employees. Safety committees are not just about checking a box, they help create a safe work environment in a way that becomes part of the organization’s culture.

Benefits of an Active Safety Committee

Having an active safety committee comes with several benefits that support both the organization and its employees. Some examples are:

• Fewer workplace injuries. One of the most significant benefits of having a safety committee is a reduction in workplace injuries. Over time, committees will begin to identify trends, like repeated lifting injuries or slips in common areas, and respond by recommending lifting trainings or suggest that employees need to wear nonslip shoes. When these improvements are implemented and reinforced, injury rates often decline significantly.

• Insurance savings. Insurance carriers pay close attention to how seriously an organization takes safety. An active safety committee that documents meetings, follows through on recommendations, and tracks results can improve underwriting outcomes when presented by the broker.

• Improved staff morale and retention. Employees like to feel heard. When staff see leadership taking action on safety issues they have raised, whether it is adding nonslip shoes, improving lighting, or increasing trainings, it fosters trust. And, in a field where burnout and turnover are high, trust matters.

• Regulatory compliance. Under OSHA’s General Duty Clause, employers are responsible for maintaining a workplace free from recognized hazards. A safety committee helps fulfill this obligation and can serve as documentation of due diligence during audits or inspections. In California and several other states, safety committees may also play a role in meeting state-specific requirements related to workers' compensation or injury prevention plans.

Best Practices for Human Services Settings

To be effective, a safety committee needs more than just good intentions. The most successful ones follow key practices:

• Balanced membership. Include management and frontline workers. Direct support staff often have the insight into daily risk and often have ideas to prevent injuries.

• Consistent meetings. Monthly or quarterly meetings keeps safety on the forefront of your mind. Sporadic meetings will not lead to lasting results.

• Review of incidents and near misses. Analyze both what went wrong and what almost went wrong. These near misses are also important to document and put steps in place so an injury does not occur in the future.

• Site walkthroughs. Physically inspecting locations can uncover hazards that are not easily visible on paper.

• Clear documentation. Keep meeting minutes, assign follow-ups, and track progress. This level of detail not only improves accountability, it can also support insurance or OSHA documentation if needed.

If you are just starting out, OSHA has a resources for effective health and safety committees along with many other state and national safety organizations.

For human services organizations, safety is more than checking a box, it is essential to long-term stability. Fewer injuries mean fewer claims, which leads to less disruption, and a stronger team. A well-run safety committee is a low-cost strategy that leads to a safer work environment and a cost savings outcome.

To learn more about how Rancho Mesa can support your safety committee’s efforts, contact me at (619) 486-6569 or jmarrs@ranchomesa.com.

Top Work-Related Injuries for Landscapers

Author, Greg Garcia, Account Executive, Rancho Mesa Insurance Services, Inc.

Travelers Insurance’s peer data from 2020 to 2025 report showcases the top work-related injury causes within the landscape industry.  Looking at the top of this list, slip/trips/falls as well as strains account for roughly 40% of the injuries reported. 

With the state of the worker’s compensation marketplace clearly hardening, as shown by the proposed 11% increase to the pure premium rates in CA, now is a great time to make sure your landscape company is focused on preventing these top work-related injuries. (Learn more about the pure premium increase.)

Managing and accounting for slips, trips and falls for landscape companies can be difficult. Best-in-class landscape companies mitigate these claims by managing their job hazard analyses (JHAs). Documenting and communicating to the crew these JHAs can be very beneficial in the prevention of slips trips and falls.  Examples include calling out a portion of the sidewalk that may be uneven due to a root, or a hole in the grass. It can also include identifying  a slippery slope if it had just rained the night before, or perhaps when crew members are working in the morning hours when dew is present. Staying diligent with your company’s JHAs can help reduce these slip trips and falls.

The second major cause of work-related injuries referenced for landscape companies would be strains.  The day-to-day demands of being a landscape professional can be very taxing on the body as it is a very physical occupation. To help mitigate some of these strains, landscape companies should consider implementing a mobility and stretch program into their organization’s daily routine. This would consist of the crews getting together either in the morning at the yard, or at their respective jobsites and performing a quick 5 minute stretch routine to make sure their bodies are ready for the physical activity of the day. Rancho Mesa’s Mobility & Stretch™ Program offers an effective way to ensure employees are stretching prior to performing their job duties.

With workers’ compensation rates on the rise, now is a great time to revisit these key elements of your safety program and make sure your team is doing everything possible to help mitigate future work-related injuries.

For more information or to learn more about our safety resources, email me at ggarcia@ranchomesa.com or (619) 438-6905.

Signs of Future Increased Costs in Workers’ Compensation Continue

Author, Kevin Howard, Partner, Rancho Mesa Insurance Services, Inc.

Senator Anna M. Caballero recently introduced Senate Bill 555 (SB 555), also known as the Workers’ Disability Adjustment Act. While the bill is currently stalled in the Senate Appropriations Committee, SB 555 could, if signed into law, increase weekly Permanent Disability (PD) benefits for injured workers in the California workers’ compensation system, adjusting these annually to reflect economic inflation through a cost-of-living adjustment (COLA).

According to the official Senate Committee analysis, the projected cost of SB 555 is estimated at $570 million to $907 million over eight years. This potential increase in long-term claim cost could catch workers’ compensation underwriters and actuaries off guard. Exploring things further, we have provided an example below of an injured worker’s permanent disability benefits should SB 555 generate enough interest back in Sacramento.

Meet Joe the Roofer

If Joe is deemed 25% permanently disabled, here is how his PD benefits would look before and after SB 555. I am using a 5-year period in this claim scenario:

Before SB 555 (Current System)

• Weekly Benefit: $290/week

• Duration: 5 years

• Total: $75,400

(Note: These rates have remained unchanged since 2014.)

After SB 555 (COLA)

• Benefits increase annually with inflation (assume 3% COLA/year)

• Estimated Total: $80,051

Bottom line: Over five years, Joe would receive 6–8% more in PD benefits under SB 555. These payments would reflect modern cost-of-living realities for injured workers.

Projecting these new claim costs could dramatically impact underwriting within the worker’s compensation marketplace. It would most certainly elevate premiums to levels not been seen in years.  While it is clear this bill may continue to be stalled, we expect the push for higher permanent disability benefits to be a regular theme in this and other potential new legislation.

How to Prepare For the Hardening Workers’ Compensation Market

Work closely with your broker at your pre-renewal meeting to understand your company’s key performance indicators and how those can be leveraged for the best possible pricing outcome at renewal. Re-visit your safety program and protocol, focusing on lowering claim frequency and severity.  And finally, understand how your broker is developing your risk profile to the underwriters. To learn more about how Rancho Mesa can help in these areas, contact me at khoward@ranchomesa.com or call me at (619) 438-6874.

About the Author
Kevin Howard is a Commercial Insurance Broker at Rancho Mesa Insurance Services, Inc., specializing in risk management and insurance solutions for artisan contractors including solar, roofing, and other skilled trades. Based in San Diego, California, Kevin serves contractors throughout the Southern California region, helping them protect their businesses with tailored coverage and proactive support. His clients benefit from access to exclusive tools like the SafetyOne™ Platform, RM365 HRAdvantage™ Portal, and workers’ compensation claims advocacy services, designed to improve safety, streamline HR processes, and support better claims outcomes.

Have you Experienced Turbulence in Your Commercial Auto Insurance Renewal?

Landscape maintenance contractors with large fleets of service trucks are tough to place in the current insurance market. This, along with a hardening general liability market has led to some frustrating insurance renewals.

Rancho Mesa Insurance’s Green Industry Practice Group has helped over a 100 landscape and tree care customers currently operating across the country with navigating this turbulent market. Connect with them for a more detailed review of your company’s insurance placement needs.

“Our current landscape customer base has an average fleet size of 40 vehicles,” said Drew Garcia, Vice President with Rancho Mesa, Landscape and Tree Care Group Leader. “We are a fit for all types of landscape organizations generally starting at $3,000,000+ in annual revenue.”

Reasons Behind the Difficult Insurance Market

• Increase in bodily injury claims

• Increase litigation cost

• Distracted driving

• In-experienced drivers

• Increase cost for vehicle repair

Areas where Landscape Companies Can Focus

• Implement motor vehicle report standards

• Review physical damage needs for comprehensive/collision

• Provide formal annual driver training

• Ongoing driver monitoring and training

• Implement technology (i.e., telematics, fleet monitoring, dashcam)

• Train drivers based on data revealed from technology

• Perform daily/weekly vehicle inspections

• Detailed auto accident and incident reports and prompt reporting procedures

Rancho Mesa’s Green Industry Insurance Solutions

• Property and casualty insurance only (i.e., general liability, auto, umbrella, workers’ compensation, management liability, cyber liability, professional, pollution, property, inland marine)

• Multiple insurance carrier partners

• SafetyOne™ mobile app with landscape and tree care-specific toolbox talk content

• Trusted by over 100 landscape and tree care (green industry) businesses across the country

CA Insurance Commissioner Lara Approves 8.7% Workers Compensation Increase

Rancho Mesa’s Alyssa Burley and President David Garcia discuss California's approved 8.7% workers' compensation insurance rate increase, its impact on businesses, and practical steps business owners can take to prepare for the changes effective September 1st.

Alyssa Burley: You're listening to Rancho Mesa’s StudioOne™ podcast, where each week we break down complex insurance and safety topics to help your business thrive. I'm your host, Alyssa Burley, and I'm joined by Dave Garcia, president with Rancho Mesa. And we're going to talk about California's now approved workers' compensation insurance rate increase. Dave, welcome to the show.

Dave Garcia: Thanks, Alyssa, glad to be back here in StudioOne and anxious to get this information out there for everybody.

AB: Yeah. So we've actually been talking about the proposed workers' compensation increase for, I don't know, the last few months. And we've published multiple articles and podcast episodes on the subject, and now it's actually official. California's Insurance Commissioner, Ricardo Lara, has approved an 8.7% average rate increase.

So Dave, in your opinion, what kind of impact will this increase have on California businesses?

DG: Well, you know, this is a deep, deep topic. So I'll try to be brief right now. So in short, you know, we've obviously been talking a lot about this recently, and particularly about what's driving these increases. But rather than go over all those elements again, I'd encourage the audience to listen to the three-part series I did recently with Margaret Hartman. She's the Senior Vice President and Chief Marketing Officer for Berkshire Hathaway Homestate Companies. They're one of the largest specialty work comp carriers in California and Margaret gave just tremendous insightful overviews of what's at the heart of this and the increases range from medical cost inflation, payroll inflation, and cumulative trauma claims just to name a few of the many cost drivers.

So to fix those, we're definitely going to need reform, but as with anything else, to address those bigger problems that are going to require that type of reform, I just don't see that coming until 2027 at the earliest. Maybe election year 2026, puts a little upward pressure there, but I'm not going to bank on anything happening before 2027.

So with Laura's decision, the WCIRB just recently released their new pure premium rates per class code, which we take the opportunity then to download that into our pricing models here at Rancho Mesa. So that gives us an ability to identify the individual impacts these new pure premium rates will have on each class code.

AB: Okay, and we'll include links to those three episodes with Margaret in the episode notes for this episode. And I would encourage our listeners to reach out and see if this increase or how this increase is going to impact your individual class code.

Now, when can California business owners expect to feel the result of this increase?

DG: That's a great question, Alyssa. So this all goes into effect September the first of this year. So these pricing changes will take effect on that day. But the thing that business owners should understand is that those changes will not take effect for them until the actual renewal time of their workers' compensation policy.

AB: All right. So businesses with a renewal date on or after September 1st will feel this change. While someone who renews, let's say in February, won't feel this impact until February 2026, correct?

DG: Yeah, exactly. You’re spot on there. And that's why I think we've tried to kind of be the canary in the mine here by publishing so many articles and podcasts months ago to try to get this message out because, so many of the businesses that--so for those business that renew really close to September they have some opportunity to get prepared the time is short.

AB: All right so there are things business owners can do to prepare even if they renew early September, maybe October?

DG: Yes, there's ways to prepare now and that's whether your renewal is in September or some month after September. But let me just stress this, time is of the essence. There is no time to delay. So the closer you are to September 1st in your renewal, you really have no time to spare.

So along those lines, we've got solutions here that we think will help all businesses. So we're going to be taping an episode here in the next few days that will spell out exactly what businesses can do now to try to mitigate these increases. The good news is we have the answers and on top of that we're more than willing to roll up our sleeves and get to work.

AB: If you're talking to your client today we know the time is over the essence what are you telling them?

DG: You know I'm telling them that the first thing they need to do is understand what the actual individual increase is to them and their pure premium rates. So they need to reach out to the broker, hopefully they're aware of what those changes are, and find out is it a single digit, double digit, high double digit increase, it's going to really make a big difference.

The second thing they really need to do is kind of roll up their sleeves and have somebody audit their safety program.

And then thirdly, I think it's time to really mine into your claims and try to develop solutions to the root causes of those claims. Without those three things, the wave's going to hit you and you're not going to see it coming.

So we all need to just encourage one another, now's the time to be proactive. And this is work that is able to be done. This is not overwhelming work. It's a matter of being proactive, understanding the situation, and then implementing a strategy and moving forward.

So businesses that are out there, reach out to your broker, reach out to us, talk to somebody now, don't wait.

AB: All right, and I look forward to discussing all of those ways California businesses can prepare now for the coming increases. So Dave, thank you for joining me in StudioOne.

DG: Alyssa, thank you so much, an audience out there. Really, time is of the essence. So make those calls.

AB: All right. Well, thanks for tuning in to our latest episode produced by StudioOne. If you enjoyed what you heard, please share this episode and subscribe. For more insights like this, visit us at RanchoMesa.com and subscribe to our weekly newsletter.

Mid-Year Insurance Outlook for Contractors: Rising Costs, Tighter Margins

Author, Casey Craig, Account Executive, Rancho Mesa Insurance Services, Inc.

As a contractor in California, you are likely feeling the squeeze, right now. Material costs are up, labor is more expensive, and insurance, typically a predictable line item, is becoming a growing burden on your bottom line. 2025 is proving to be one of the most challenging years yet for construction business owners. Even companies with best practice risk management controls in place are getting hit with premium increases that are hard to absorb.

Auto Insurance

Auto premiums continue to climb, making fleet coverage one of the fastest growing expenses for contractors.

Replacement parts and labor costs have skyrocketed. Even a basic bumper repair now involves expensive sensors, which take longer to replace and recalibrate.

Distracted driving is at an all-time high. Today’s younger drivers have never known life without a smartphone, and it shows—claim frequency is rising, especially in high traffic areas like Southern California.

These and other factors are pushing rates higher, regardless of your claims history and shrinking margins even for the most careful contractors.

Workers’ Compensation Rate Increases Expected Soon

Even as jobsite safety improves and injury rates fall, workers’ compensation costs are trending upward—driven largely by the costs associated with litigation and cumulative trauma claims.

Each claim costs more, especially when attorneys get involved.

Once a claim becomes litigated, it can escalate into a cumulative trauma (CT) claim. This drastically increases costs while also impacting your experience modification (Ex-MOD). Even when carriers believe the injury did not occur on the job, the burden of proving it often forces them to settle anyway.

Fraudulent or exaggerated claims are becoming more common, particularly after layoffs or when employees feel disgruntled.

Contractors with tight margins and lean crews are at higher risk as a single claim can now have twice (or more) the financial impact compared to just a few years ago.

Shrinking Margins: More Pressure, Less Room for Error

Between rising insurance costs, wage inflation, and higher overhead, contractors are operating with less margin for error than ever before. Jobs that were profitable five years ago may now just get you to breaking even—or worse. Compound this with fewer jobs to bid leading to more competitors bidding on each job, all while trying to remain profitable.

This puts even more importance on risk management and proactive insurance planning. It is not just about reducing the frequency of accidents—it is about protecting your margins and keeping your business viable in a high-cost environment.

What You Can Do Right Now

Do a thorough review of your insurance policies to ensure you have the broadest coverage in place and understand clearly where the market is headed in advance of bidding projects. Revisit your stretch and mobility program, heat illness prevention protocol, and ladder safety training—especially with the rise in fraudulent claims. Avoidable injuries will only add to the pressure and compromise margins.

Ensure your fleet safety program is updated and consider using cameras or apps in vehicles that restrict phone use while driving.

Make sure foremen and all staff are treating employee’s well. Disgruntled employees are typically the ones who can and will file claims if layoffs are required.

Track and manage claims closely to prevent small issues from becoming a larger impact to your Ex-MOD and your future workers’ compensation costs. This includes building out a formal, written return-to-work program.

Partner with a broker who understands your trade and can advocate for the most competitive rates and broadest coverage for your exposures.

If you have any questions relating to this article, I am more than happy to provide a detailed audit of your insurance portfolio and safety programs. Contact me at ccraig@ranchomesa.com or call me at (619) 438-6900.

Preparing for the Summer Heat: Heat Illness Prevention Resources from Rancho Mesa

Author, Jadyn Brandt, Client Communications Coordinator, Rancho Mesa Insurance Services, Inc.

As temperatures continue to rise through the summer months, heat illness prevention is essential to protect employees from the dangers of extreme weather.

Rancho Mesa has a variety of safety resources available for employee training and incident reporting.

Heat Illness Prevention Workshop/Webinar

Rancho Mesa’s Heat Illness Prevention workshop provides an in-depth overview of California’s Heat Illness Prevention regulations for outdoor and indoor workplaces. This workshop is also available as a recording (webinar) that covers the key elements required to protect employees from heat-related illnesses and ensure company compliance. It can be access through the SafetyOne™ Learning Management System.

Completing this training counts towards earning the RM365 Advantage Safety Star™ Program certificate of completion.

Heat Stress Online Training Course

Two Heat Stress online training courses are available through the SafetyOne Learning Management System. Employees assigned to the Heat Stress training will watch a training video and take a quiz to complete the course.

Toolbox Talks

A number of Toolbox Talks are available in SafetyOne in both English and Spanish, and can be used for weekly safety trainings:

• Heat Exhaustion/Sunstroke

• Heat Illnesses

• Heat Stress Prevention for Landscape Contractors

• Heat Stress Prevention for Tree Care Companies

• Protecting Yourself Against the Heat

• Warning - Extreme Heat is Coming

Observation Reports and Mobile Forms

SafetyOne app users can utilize Observations to document when heat Illness prevention programs are followed on the job site and identify when there is an issue.

Mobile Forms can be used to collect and report safety data relating to heat illness using templates such as accident reports, incident reports, and daily reports.

Heat Advisories

SafetyOne administrators can utilize the Company News function to send heat advisories to employees who may be working in high temperatures, and remind those employees of ways to stay safe in the heat.

Documentation through the HR Portal

If an incident does occur on the job, employers can document the incident in their OSHA 300 logs through the RM365 HRAdvantage™ Portal.

For more information about heat illness prevention resources available through Rancho Mesa, contact your Client Technology Specialist.

Liquidated Damages: What Every Contractor Needs to Know

Author, Andy Roberts, Account Executive, Rancho Mesa Insurance Services, Inc.

For a surety agent and underwriter, there are specific provisions within a contract that are important. One of the more critical provisions, references Liquidated Damages (LD). Often overlooked by contractors, LDs represent important elements of the contract that can cause significant financial losses on a project. So what are LDs; why are they important; and, what can contractors do to make sure the LDs in their contracts are fair?

Liquidated damages are daily charges within a contract that come into effect when there are delays on a project. The amount of the charge is spelled out within the contract, usually as “$X amount per day,” and are put into place to compensate the project owner for losses they may experience when a project’s completion is delayed. While that seems straightforward, this provision is very important and contractors need to understand what can happen if LDs are enforced on a project because of their delay.

If an owner is assessing liquidated damages on a project, the concern is that the contractor is going to start minimizing profits and depending on the amount, it could happen very quickly. Additionally, as those profits drop, cash flow can become an issue. This will lead to a potential default due to the financial distress which would trigger the surety’s involvement. There are a couple of ways contractors can mitigate their exposure to liquidated damages.

First, contractors should try to limit their exposure by capping the amount of the damages that can be assessed. We often see flow down provisions within subcontracts, where the higher LDs are used and it doesn’t make sense for the sub-contractor to take on that risk when their contract amount is significantly smaller than the prime contract amount. Second, contractors should try to negotiate terms that would limit their exposure to the damages that they cause.

While the liquidated damages provision within construction contracts is often overlooked, the daily amount that can be assessed can quickly become significant and should be considered prior to signing a contract. 

Should you have more specific questions about LDs within your contract, give me a call at (619) 937-0166 or email me at aroberts@ranchomesa.com.

A Contractor’s Best Practice Approach to Price Escalations in the Current Market

Author, Anne Wright, Surety Relationship Executive, Rancho Mesa Insurance Services, Inc.

Historically, market conditions and economic factors have contributed to both contractors and subcontractors having to deal with price escalations. Today, the uncertainties of how the tariffs will impact the construction industry is causing many to rethink their pricing models and contracts.

I engaged the input of a couple of our colleagues in the legal realm here in San Diego– Luke Thompson of Thompson Law & Consultation and Jeffrey Baird with Finch Thornton and Baird, to get their take on price escalations. And, I thank them for their feedback on presenting some information that might be meaningful to our audience who are unsure how to handle the rising costs.

One notable observation regarding today’s construction industry suggests that some companies pursue their backlog of projects without proper consideration of profits. Many contractors have concerns about an uncertain flow of money in both the public and private sectors, so they are taking these jobs without proper evaluation of the profitability of the job and the balance sheet.

The construction industry certainly learned some lessons during COVID for dealing with cost increases from project delays, primarily from supply chain issues that impacted budgets for both labor and materials, and schedules. Both public and private owners, did, however, often recognize that there needed to be some flexibility with schedules and prices as a result of these impacts from supply chain problems. 

General contractors may work to include protections in their prime contracts with the owners to address price escalations. Educated subcontractors will also make sure that they confirm these provisions in the prime contract, and that these flow down in their subcontract.

So, here we are today with some lingering questions about the effects of the supply chain and market conditions. And in 2025, the discussion now also includes potential impacts from tariffs. Contractors are now wondering what products might the tariffs affect? How do we adapt to the on again/off again news and chatter about the what, when, and how much cost increases might come from tariffs on various products?

In gathering some feedback, I have been told that some contractors are now submitting their proposals with language regarding long-lead items and material escalation warnings due to tariffs.

Savvy subcontractors are also requesting copies of the prime contracts to review the escalation provisions to make sure they have some protection, and if not what they need to negotiate into their subcontracts to ensure that they are protected. Thorough contract review and modifications will always be important regardless of the market conditions.

Steel, wire and certain other commodities regularly fluctuate in pricing. That said, it is prudent to keep a watchful eye on such items, and have good communication with suppliers, general contractors, and project owners to manage pricing changes and expectations.

Historical data that suggests vendors will honor prices represented in the purchase orders and offset the loss by making higher margins on future orders when the market settles down. However, if we have learned anything about this industry, nothing is that predictable. 

So, your best practice strategy is to pay close attention when talking to your vendors, and review your contracts and subcontracts closely to make sure you have the most reasonable protections as possible. Having an attorney review each contract is typically money well spent.

Feel free to reach out to me for a referral to an industry partner in the legal realm. I can be reached at awright@ranchomesa.com or (619) 486-6570.

And again, I thank Luke Thompson and Jeffrey Baird for their contributions here.