The Future of Business Insurance in California: Trends to Watch

The business world of California is often full of lucrative opportunities and exciting innovations. Still, even this robust commercial, technological and entertainment epicenter is not immune to changes in the world around it. That’s why simply understanding your company’s current business insurance needs may not be enough. Rather, sufficiently forward-thinking leaders and owners may need to educate themselves on what to expect in the future regarding their coverage.

What Trends May Impact California Business Insurance?

Business insurance typically refers to a multifaceted, versatile collection of coverages and policies. The contents of this insurance portfolio can be quite unique, given the vast array of businesses throughout the commercial sector. Still, despite so many companies having different compositions of business insurance, many coverages relevant to most industries may be impacted by specific patterns and trends, such as the following:

• Climate change—California has been among the many states significantly impacted by the effects of climate change. As temperatures rise and natural disaster frequency increases, the resulting higher risk levels could make it more expensive to acquire coverage like commercial property insurance, business interruption insurance, inland marine insurance and commercial auto insurance.
• Market exits—Several major insurance carriers have ceased to sell certain types of coverage in California and other markets throughout the United States perceived to be too risky. Should this trend continue, the resulting limited policy options could further increase rates and make it more difficult to get certain types of insurance altogether.
• Economic and labor trends—As the cost of living rises throughout many parts of California and remote and hybrid work arrangements continue to become more popular, potential off-site employees should be accounted for. For example, if a large portion of your workforce moves elsewhere in the country, you could consider downsizing your offices, thus potentially lowering commercial property insurance costs. However, this may also impact other coverage needs, such as greater cyber liability policy limits and group health insurance plan adjustments.
• Technological advancement—The Golden State is no stranger to the technology industry, and as digital solutions and online tools become standard components of workplaces, cyber risks and exposures must be adequately addressed. While already emerging as an essential loss control measure, an even more robust cyber liability insurance policy may become an absolute necessity.

We’re Here to Help

Established in 1967, JSW Insurance has the knowledge and wherewithal to understand the California insurance market at a deep and detailed level. Contact us today to discuss your current and future business coverage needs further.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.