Blog - Month: August 2025
How to Implement an Effective Safety Incentive Program
Although not required by OSHA, some employers have shown that one of the best ways to positively motivate employees is through a safety incentive program that rewards safe behavior and participation in workplace safety efforts.
These programs need not be complicated, and some of the simplest have proven most effective. The best ones encourage safe behavior, teamwork and hazard recognition, while discouraging non-reporting of legitimate accidents or frivolous claims.
How safety incentive programs work
At their core, safety incentive programs offer rewards or recognition to employees or teams for meeting specific safety goals. These might include:
- Zero injuries over a period of time
- Reporting near misses
- Completing safety training
- Using personal protective equipment consistently
- Identifying and correcting safety hazards
Avoid “everything or nothing” goals, and ensure the prize is not the main motivator, as both are potential pitfalls that can discourage employees and promote cheating and under-reporting.
Getting started
Analyze past accident reports to understand the types of incidents that have occurred. Inspect your facility and correct all known hazards. Focus your incentive program on high-risk areas of operation.
Brainstorm with your safety team and employee representatives to develop goals that will promote increased workplace safety and measurable improvements. You’ll also need to decide what kind of incentives to offer staff who meet these goals.
When planning your program, your team should ask themselves:
Is it rewarding? The rewards must have a direct and immediate appeal to the targeted employees. If unsure, ask the employees.
Is it entertaining? The program should be something employees enjoy and want to participate in regularly.
Does it provide daily reminders? Communication is key to the success of a safety incentive program, so keep your staff updated on their progress. One popular method is to have a sign displaying the number of days since a safety incident.
Does the program allow rewards to grow? There should be milestones, such as every 100 days without an incident, that increase the reward over time.
Is it easy to understand? It must be clear, concise and easy for employees to follow.
Is it visual? Visual elements like safety signs or progress displays should be bright, colorful and attention-getting — and placed in conspicuous locations.
Is it flexible? An incentive plan that allows modifications gives management the latitude to keep it fresh.
Does it provide recognition? This applies to both group and individual achievements.
Is it easy to administer? Maintaining administrative records avoids potential confusion and ensures fairness.
Successful incentives
While cash rewards are frowned upon by safety professionals, you can still have appealing rewards, such as:
Gift cards: For various retailers, restaurants or online shopping sites like Amazon.
Bonus time off: An outstanding employee may get a Friday or half day off.
Recognition awards: Certificates, plaques or public acknowledgment of safety achievements in company newsletters or meetings.
Wellness rewards: Gym memberships, spa vouchers or other health-related perks.
Team celebrations: Lunches, outings or other social events that boost morale and foster camaraderie.
Experience-based rewards: Tickets to sporting events, concerts or other entertainment options.
Personalized safety gear/tools: High-quality safety equipment or tools customized with the employee’s name or initials.
Company swag: Items like shirts, hats or mugs with the company logo are often seen as a symbol of belonging and recognition.
How New U.S. Trade Policies Affect Insurance Costs
President Trump’s sweeping return to tariff-heavy trade policies in 2025 is sending ripples across the economy, including the cost of property insurance claims.
The latest round of tariffs, which include steep duties on imported construction materials and auto parts, many of which are sourced from China, threatens to drive up claims costs in both personal and commercial lines, particularly property and vehicle insurance. The result is likely to be higher insurance rates to account for higher claims costs.
Here’s a look at the effects on vehicle and commercial property insurance under the turbulent and constantly changing tariff regime.
Vehicle insurance effect
Depending on where they come from, vehicle parts face tariffs as high as 50% (in the case of China), which is hitting both original equipment manufacturer and aftermarket parts. Since more than half of all U.S. vehicle parts are imported, the cost of repairs has increased sharply, even for minor collisions.
According to the American Property Casualty Insurance Association, this could raise auto insurance claims costs by $7 billion to $24 billion annually.
The website Insurify predicts that full-coverage auto insurance premiums could rise 19% by year’s end on the back of higher repair costs and delays in parts availability, which also increase settlement times and costs.
For commercial fleets, this dynamic is particularly problematic. Businesses may face longer vehicle downtimes and delayed operations after an accident, and higher deductibles or premiums to account for elevated risk.
Commercial property insurance effects
Many of the main construction materials are also subject to tariffs:
- 25% across-the-board on steel
- 20% on Canadian lumber
- In early July, the president promised a 50% tariff on copper (used in wiring).
- Trump increased tariffs on steel and aluminum imports to 50% on June 4 and expanded them to include household appliances like refrigerators and dishwashers on June 12.
With these tariffs in place, the cost to rebuild or repair damaged property has increased significantly. The National Association of Home Builders estimates that tariffs have added $7,500 to $11,000 to the average cost of constructing a new home.
Business interruption risk
If tariffs inflate raw material costs, this could create uncertainty across supply chains. Therefore, businesses may be more vulnerable to supply chain breakdowns and related operational delays, increasing the risk of business interruption.
If tariffs cause delays in material inputs, they could slow down or stop manufacturer operations.
Industries like electronics, automotive parts, construction materials and apparel are especially exposed. Many of these businesses rely on components or raw materials from Asia, where even slight delays or cost increases can disrupt production and reduce profitability.
What business owners can do
What makes the current situation especially difficult for insurers is the unpredictability of Trump’s tariff policies. With frequent changes and shifting targets, insurers struggle to accurately model future claims costs, which complicates underwriting and risk pricing.
The lack of clarity around how long tariffs will remain in effect or whether additional duties will be imposed introduces pricing volatility that’s not easily absorbed by carriers. In some cases, insurers may respond by tightening underwriting standards or increasing premiums in advance to safeguard against future cost surges.
With tariffs driving up claims costs and likely hitting insurance costs, business owners are faced with several considerations:
- Review replacement costs and policy limits: Ensure the policy reflects current rebuilding costs, accounting for inflation from materials and labor. We can help you review your replacement cost.
- Consider higher deductibles: A higher deductible can reduce a policy’s premium, but it means the business will have to pay more out of pocket if it incurs a claim.
- Plan for longer claims cycles: Understand your carrier’s average claim timelines and adjust your business continuity plans accordingly.
- Find new vendors: If a business relies on parts or products from a high-tariff country and is concerned about resulting supply chain interruptions, it may want to explore new sources in other countries.
How to Prepare for Rolling Blackouts
As wildfire seasons grow longer and more intense due to rising temperatures, utilities in high-risk areas are increasingly using public safety power shutoffs to prevent fires sparked by electrical equipment, one of the leading causes of wildfires.
These proactive outages can leave communities without power for hours — or even days — especially during dry, windy conditions. If you live in an area that is prone to wildfires and there is a possibility of rolling blackouts by your utility, you need to be prepared if the power is shut off for an undetermined amount of time.
Prepare in advance
According to the California Public Utilities Commission and Ready.gov, an agency within the Department of Homeland Security, the best time to prepare for a rolling blackout is before fire season begins.
Make an emergency plan: Every household should have a plan that includes communication protocols, meeting points and access to emergency contacts.
Build an emergency kit: Stock it with:
- Flashlights and fresh batteries
- First-aid supplies
- Portable phone chargers or power banks
- A hand-crank or battery-powered radio
- At least one gallon of water per person per day (plus water for pets)
- Nonperishable food that doesn’t require cooking
- Blankets and manual can openers
Plan for medical needs: If you or a loved one relies on electrically powered medical devices, talk with your doctor about alternative power sources. Know how long medications can be safely stored at higher temperatures if refrigeration is unavailable.
Prepare your home:Bookmark your utility’s outage map, learn how to manually open electric garage doors and understand your home’s circuit breakers and fuse boxes.
During the outage
During a blackout, you can stay safe and manage daily life without power by:
- Staying informed: Use a battery-powered radio or your car’s radio to listen for emergency updates.
- Unplugging electronics: Unplug appliances and electronics to avoid damage or data loss. Unplugging also prevents power surges when electricity is restored.
- Keeping refrigerators and freezers closed: The refrigerator can keep food cold for about four hours, while a full freezer can maintain a safe temperature for about 48 hours. Monitor temperatures with a thermometer and use coolers with ice if necessary.
- Using generators safely: Always run generators outdoors, at least 20 feet from windows or doors, and never inside garages or enclosed spaces. Improper use can cause deadly carbon monoxide buildup.
- Avoiding open flames: If using candles, keep them away from anything flammable and never leave them unattended.
- Watching for downed lines: Southern California Edison recommends staying at least 100 feet away from fallen power lines and calling 911 to report them.
When the power comes back on:
- Check food and medications: Discard anything that has been above 40°F for more than two hours or shows signs of spoilage. Replace any temperature-sensitive medication unless the label says otherwise.
- Reconnect electronics gradually: Turn appliances back on one at a time to avoid overloading circuits.
The takeaway
While homeowners in at-risk areas must be prepared for wildfires, they also have to be ready for rolling blackouts during wildfire season.
That requires preparation and a plan you share with the family. Consider working on it together so everyone is familiar with the plan should a power outage hit your neighborhood.
Insurance Commissioner Approves Workers’ Comp Rate Increase
California Insurance Commissioner Ricardo Lara has ordered an 8.7% average advisory pure premium rate hike for policies incepting on or after Sept. 1, 2025.
The rate follows a substantial uptick in claims and claims adjustment costs over the past four years, resulting in a $1.3 billion underwriting loss for the industry in 2024, the first since 2014. However the market is still competitive and carriers and carriers may price their policies as they see fit.
The 8.7% increase is an average across nearly 500 class codes, and according to the Workers’ Compensation Insurance Rating Bureau (WCIRB), employers in several industries may see premiums begin to rise after hitting a 10-year low last year.
The pure premium rate is a benchmark insurers use to price policies. It only accounts for the cost of claims and adjusting those claims, not expenses such as office operations, personnel costs outside of claims representatives, marketing or other overhead.
What’s driving costs
The main drivers of the rate increase, according to the California Department of Insurance and the WCIRB — which had recommended an 11.2% hike — include:
Rising medical costs. The average medical cost per claim has been steadily climbing since 2016, and reached $36,488 in 2024, up 9% from $33,573 the year prior and 28% from $28,500 in 2016. These costs are for claims that include wage replacement payouts and medical costs, meaning the injured worker was unable to work for a period of time.
Rising costs for medical-legal reports. These are prepared by a qualified physician to assess an injured worker’s condition and its relationship to their workplace injury. This report is crucial for determining eligibility for benefits. As medical costs have increased, there has been a corresponding increase in requests for these reports, which adds to the cost of a claim.
Growing effects of cumulative trauma claims. These are injuries that develop over time, typically from repetitive motions. There is an entire industry in Southern California that helps injured workers file these types of claims, which are growing significantly in frequency. The WCIRB now estimates that over one-fifth of indemnity claims involve cumulative trauma.
Rising claims adjusting costs. The average cost of adjusting workers’ comp claims that include indemnity payouts rose to $12,600 in 2024 from $9,800 in 2021, an increase of 28%. The Rating Bureau projects it will reach $14,300 in 2027.
The effects
The premium an employer pays depends on their claims experience.
According to WCIRB, more than 280 classes are projected to face a higher-than-average pure premium increase next year. Conversely, some sectors will see lower pure premium hikes, while others may see decreases.
But thanks to a robust workers’ comp market, employers with strong safety records and low X-Mods are likely to continue receiving favorable pricing.