Ep. 613 California’s Workers Comp Rates Poised to Increase Again: What the 10.4 Proposal Means for Landscape Employers

Rancho Mesa's Alyssa Burley interviews Greg Garcia, Account Executive in the Landscape Group, as he talks about the recently proposed increases in workers’ compensation insurance pure premium and what it means to landscape companies.

Show Notes: ⁠Subscribe to Rancho Mesa's Newsletter⁠

Director/Host: ⁠Alyssa Burley⁠

Guest: ⁠Greg Garcia⁠

Producer/Editor: ⁠Jadyn Brandt

Music: "Home" by JHS Pedals, “News Room News” by Spence

© Copyright 2026. Rancho Mesa Insurance Services, Inc. All rights reserved.

Transcript

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 Greg Garcia, Partner with Rancho Mesa. He specializes in providing insurance solutions to landscape companies. Today, we’re going to talk about the recently proposed increases in workers’ compensation insurance pure premium and what it means to landscape companies.

Greg, welcome to the show.

Greg Garcia: Hey, Alyssa. Thanks for having me.

AB: Now, the Workers' Compensation Rating Bureau of California, or the WCIRB, is proposing a 10.4% blended pure premium rate increase for 2026.

Will you explain what that actually means for employers and why it doesn't translate evenly across all class codes?

GG: Yeah, that's a great question, Alyssa. And I think what the, what you said it nailed it right on the head is it's a blended average across all industries and classification. The WCIRB believes that this is what insurers will need to cover future claim costs. So every class code's pure premium rates will be determined by its own loss experience.

Some class codes are seeing improving results, while others like the landscape industry are seeing worsening trends. And I think we'll see probably in mid-July is when the insurance commissioner will either approve or reject or, you know, redefine these increases. And then come September 1st of this year, each carrier will then adopt their own base rate. So it's kind of a lengthy process, but this is the first step that is really a leading indicator that we're seeing this work comp market continue to harden and something that our clients need to be prepared for.

AB: Right. So focusing on the 0042 class code. We've seen multiple consecutive years of increases. What are the key drivers behind this ongoing trend and what does it signal about the broader workers' compensation market?

GG: Yeah, that's another great question. And like you said, this is going to be the fifth consecutive year that the 0042 class code is going to see an increase on their pure premium rates. Last year, it was an 8% increase. This year, the proposed rate change is 9%. Again, like we touched on earlier, that's not indefinite, right? There's still some steps that have to come through. But last year, when the 8% was recommended for the pure premium rates to go up, every carrier did end up adopting that 8% increase on their base rates in September.

And really the main driver behind the proposed increase is that frequency is still at an all-time high with the landscape industry. You know, it's a very labor-intensive industry. Employees outside lifting. You know, back strains are still at an all-time high. Slipping falls are starting to creep up.

And another main driver would be the increase in severity claims. So with medical costs increasing, wage inflation. Claims are just getting more complex. And then now we're seeing more attorney involvement than ever before, which is leading to higher settlements. So when we're getting these higher settlements, that makes the insurers, you know, not as profitable as they once were. And that's why they're feeling like they have to take these increases on their rates to try to fund for these future claim costs that they're seeing. And then finally, the last thing is I know everybody has felt it is just the influx of cumulative trauma claims to the worker’s compensation system. I know we've touched on it on a few podcasts here it's just that's a growing issue that really there's no end in sight. So those three things are really leading to the increases for the 0042 class code.

AB: Okay. So given these potential rate hikes, what practical steps can landscape companies take right now to control their workers' compensation costs and hopefully reduce their risk of exposure?

GG: Yeah, definitely. I think the biggest thing they can do is just continue to put an emphasis on injury prevention, right? Just trying not to have claims. And I know that's easier said than done. But it's just continuing to hone in on, you know, weekly safety tailgate topics, wearing proper PPE, making sure, you know, employees are getting the proper training when they're using equipment. And then when a claim does happen, have a strong return to work program. I think that's ultra-critical to try to lower eventual claim costs for any workers' compensation claim.

And then finally, I think claims management. You know, I think that's one that gets kind of overlooked by a lot. You know, with landscape, it's like we talked about, it's so physical. That you're always thinking about the trainings and the safety but it's when the when the claim does happen making sure you're involved. Our clients are super lucky because you know we have Jim Malone here he's our in-house claims advocate and he's meeting with all of our clients throughout the calendar year and what we call you know our claim reviews and he's going over all open-indemnity work comp claims just to make sure they're getting you know adjusted properly getting consistent updates. Those things are ultra-critical to try to help lower future claim costs and making sure they're getting processed properly in a timely manner.

So, the rate increase is not meant to be scary, but I know talking to a lot of my clients, what we're supposed to do is just kind of foreshadow what could potentially be coming. Because I know any business owner, the last thing you want is just to get a surprise, right?

“Wait, why are my work comp premiums going up? I didn't have claims.” Well, as an industry whole. you know, insurance carriers are just not as profitable as they once were. And in turn, they're having to, you know, increase their rates in order to fund for these future claim costs. So I don't want to scare anybody, but it's just good information to be ready and start to budget for.

AB: Yeah. So right now, our clients, they should be being proactive, make sure they use SafetyOne to do all of their trainings, make sure that they're catching any potential issues before there is an actual incident, and then take advantage of our claims advocacy to make sure that we're managing those claims and getting employees back out there and make sure that they're safe.

So Greg, if listeners have questions about their pure premium rates and how it's going to affect their workers' compensation costs, what's the best way to get in touch with you?

GG: Yeah, they can either email me at ggarcia@ranchomesa.com or can call me at 619-438-6905.

AB: All right. Well, Greg, well, thanks for joining me in StudioOne.

GG: Thanks for having me, Alyssa.

AB: 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.