Blog - Tag: Measured Risk Insurance Services
Cal/OSHA Proposes New First-Aid Kit Rules
The Cal/OSHA Standards Board is in the final stages of approving updates to its first-aid kit rules that could take effect later this year.
The proposal aims to ensure that kits are easily located in the workplace and accessible within three or four minutes from any part of a worksite. Employers will also be required to assess “unique hazards” at the workplace and provide specialized first-aid supplies as needed to address those risks.
According to the Standards Board, the goal of the changes is to reduce the time for injured employees to receive first aid and improve treatment effectiveness.
Under the proposal, Class A first-aid kits would be required to meet the American National Standards Institute/International Safety Equipment Association (ANSI/ISEA) standard known as the “Minimum Requirements for Workplace First Aid Kits and Supplies.”
If employers choose not to use kits that comply with the new standard, the proposed rules would allow them to consult a physician or licensed health care professional about their choice of first-aid supplies.
Employers will also be required to evaluate first-aid supply needs and ensure adequate quantities and types of materials are available for employees at each job site.
At a minimum, employers shall furnish at least one approved first-aid kit. Based on the employer’s size and workplace hazards, employers shall also evaluate the need for:
- Additional first-aid kids.
- Additional types or quantities of first aid equipment or supplies.
The required contents of kits are changing, with four new items and four items being removed. The proposed regulations would require the following to be in most first-aid kits:
- Adhesive dressings
- Adhesive tape rolls, 1-inch wide
- Eye dressing packet
- 1-inch gauze bandage roll or compress
- 2-inch gauze bandage roll or compress
- 4-inch gauze bandage roll or compress
- Sterile gauze pads, 2-inch square
- Sterile gauze pads, 4-inch square
- Sterile surgical pads suitable for pressure dressings
- Triangular bandages
- Medical exam gloves (NEW)
- Tweezers
- Cotton-tipped applicators
- Antibiotic treatment, single-use application (NEW)
- Antiseptic, single-use application (NEW)
- Flashlight
- Magnifying glass
- Single-use disposable barrier device for CPR where CPR may be required (NEW)
- Appropriate record forms
- An up-to-date “standard” or “advanced” first-aid textbook, manual or equivalent
While first-aid kits are primarily for minor injuries, the board said it included ANSI/ISEA-required breathing barriers to help with resuscitative breathing and cardiopulmonary resuscitation, which can improve a person’s chances of survival while waiting for emergency services.
The above list eliminates the following from the items currently required:
- Safety pins
- Scissors
- Forceps
- Emesis basin
- Portable oxygen and its breathing equipment
Why Every Business Needs Hired and Non-Owned Auto Coverage
Even if you have company cars or a fleet of vans, occasions may arise that require an employee to run an errand in their personal vehicle or one of your employees needs to rent a car while on a business trip visiting a client.
In these circumstances if you don’t have the proper coverage, you could be leaving your organization exposed to liability if an employee injures a third party in an accident. There are two types of insurance that are vital in these situations: Non-owned auto coverage and hired auto insurance.
These two policies offer very different types of coverage, and it is important to understand each to ensure you find the policy that is right for your operation:
- Non-owned auto coverage — This insurance protects your company if sued as a result of an auto accident that you or one of your employees has in a personal vehicle while on company business.
- Hired auto coverage — This provides your company with liability insurance for vehicles that you rent, hire or borrow on a short-term basis for business purposes.If you or an employee are in a car accident while driving one of these vehicles for work, hired auto insurance can help pay for your liability costs.
You should consider these two coverage options if your company ever rents cars or vans for business purposes (including travel to conferences, visiting clients, etc.) or if employees use their personal vehicles to run company errands.
These important coverages are usually added to a general liability policy or a commercial auto policy as an endorsement or a rider.
When there are no vehicles titled in the company name, this additional coverage will serve to meet the contract requirement for commercial auto coverage in most states.
How the coverages work
Both hired and non-owned auto insurance are a type of liability insurance, meaning they will only cover property damage and injuries to third parties, as well as any legal fees, settlements or court judgements relating to third party claims. Hired and non-owned auto insurance helps cover:
- Physical damage to a third party’s vehicle,
- Bodily injuries and medical expenses if a third party is hurt in an accident with you or one of your staff, and
- Legal expenses if your business gets sued for negligence.
However, these polices won’t help with:
- Property damage to your business’s hired or non-owned vehicle.
- Medical bills if you or your employee get hurt in an accident while using rented or personal vehicles.
- Liability coverage, property damage or bodily injury from an accident while you or your employee drive for personal reasons that are not related to your business.
Do you need coverage?
If your business rents or borrows vehicles to do work or if your employees use their personal vehicles on business, hired and non-owned auto coverage is crucial to manage your risk.
It can help pay for any property damage that you or your employees cause while on company business in rented or personal vehicles. It also covers vehicles used for your business if they cause bodily injury to another driver in a car accident.
How to Avoid Being Sued for Injuries at Your Commercial Property
One of the biggest risks commercial property owners face is a visitor suffering an injury on their property.
One slip and fall can start a cascade of events, starting with a premises liability lawsuit seeking financial compensation. Your defense, as a property owner would be proving that you lived up to your duty of care to protect visitors to your property from injury.
Also, since your commercial property policy will not cover property liability, you’ll need a commercial general liability coverage as well.
Accidents happen, but if a third party is injured on your commercial property, the chances are high they’ll seek some type of compensation, either for medical costs, lost wages or both. And if they seek out legal counsel, prepare to be sued.
Prevent accidents before they happen
To reduce the chance of an accident, keep a tidy facility and fix any issues that could result in an injury. Take the following steps:
- Be proactive about inspections, repairs and maintenance.
- Have written inspection and maintenance guidelines that meet or exceed industry standards particularly as they concern safety of tenants and guests.
- Ensure your employees closely follow the guidelines and encourage them to report any issues that could result in injury.
In the discovery phase of a lawsuit, a plaintiff may ask for your maintenance and risk management procedures as well as documentation regarding whether you followed those procedures.
Your policies should be extensive and clear, but not overly intricate. Documentation is key to showing that you took reasonable steps to keep the property safe.
Your defense
Keep in mind that the duty is for you to use a reasonable amount of care. What is reasonable is determined in comparison with what an average commercial property owner would do.
There are times when accidents really do happen, and you are not automatically liable for them. You are neither expected to be perfect, nor are you expected to prevent every single mishap.
Rented property
A commercial property owner may not have a duty of care when they are not in control of their property. When the owner leases the property, the lessee may assume the duty of care to maintain the premises in reasonable condition.
A lease should clearly state that the renter is responsible for premises safety and that they indemnify the owner in any lawsuits and pay the costs to defend these lawsuits.
Insurance
Finally, make sure that you have commercial general liability insurance, which covers legal defense and potential settlements or judgments, helping protect your assets and financial stability.
Mental Health Issues Among Construction Workers Grow
Nearly two-thirds of U.S. construction workers say they have experienced anxiety or depression in the past year, according to a new survey of more than 2,000 workers and executives.
Poor mental health can increase the risk of injuries, slow projects and drive up absenteeism, turnover and disability claims. OSHA now highlights workplace stress and mental health as key safety concerns, noting that stress contributes to physical illness, impaired concentration and higher injury rates.
While the industry overall has made large strides in improving and promoting workplace safety, it’s been slow in recognizing the effects of mental health on safety. The survey by St. Louis-based construction firm Clayco explores the mental health and psychological safety issues construction workers face and how employers can establish protocols and services to identify and assist workers in need.
How mental health affects safety and performance
According to OSHA:
- Stressed and fatigued workers are more likely to miss hazards, make errors and cut corners, increasing the chance of falls, struck-by incidents and other injuries.
- Long-term stress contributes to physical problems like heart disease, high blood pressure, chronic pain and sleep issues.
- Anxiety and depression undermine focus, motivation and judgment, which can affect safety, quality and productivity.
- Workers dealing with untreated mental health issues are more likely to miss work.
Key findings from the Clayco survey
The survey by St. Louis-based construction firm Clayco found that:
- 64% of construction workers reported anxiety or depression in the last 12 months.
- Top drivers of distress were the physical demands of the work (47%), poor work-life balance (42%) and tight deadlines (41%).
- 36% missed work due to mental health concerns in the last year.
- 45% said they would feel ashamed talking about mental health, addiction or suicidal thoughts with coworkers.
- 37% of those who used mental health services reported discrimination or unfair treatment at work.
What construction leaders can do
The good news is that there are proven steps companies can take.
Treat mental health as a safety priority — Put mental health on the same footing as fall protection or lockout/tagout. Include it in safety policies, job hazard analyses, orientation and toolbox talks. Remind supervisors that stress, fatigue and distraction are risk factors for incidents.
Train supervisors to recognize warning signs — Provide frontline leaders with training on how to spot behavior changes, withdrawal, irritability, substance misuse and other signs of distress, and how to have supportive conversations. OSHA and other organizations offer supervisor guides and mental health conversation tools tailored to employers.
Promote the services you offer — Audit what mental health benefits you offer, from Employee Assistance Programs to telehealth and counseling. Place information about these services in break areas, pay-stub inserts and safety talks, and repeatedly reinforce that services are confidential.
Reduce stigma through leadership example — Leaders who talk openly about stress, burnout or using counseling send a powerful signal that it’s okay to ask for help.
Address jobsite stressors you can control — Review schedules, overtime expectations, travel demands and staffing levels. Where possible, rotate assignments to limit extended travel, set more realistic deadlines, build in recovery time after major pushes and ensure workers can take breaks and time off without penalty.
Discipline Should Be Part of Your Safety Program
Does your injury and illness prevention program spell out the disciplinary action your company will pursue if its safety rules are not adhered to?
Addressing disciplinary issues can be a very sensitive and stressful process for most managers, supervisors and employees. However, if such issues are avoided or handled poorly, it can lead to serious consequences such as property damage, injury – or even fatality.
Looking at discipline not as a form of punishment but as a rule or system of rules governing conduct or activity in order to eliminate unsafe circumstances, might ease the stress for the owner, manager and employee.
Education is the key to establishing proper disciplinary procedures and holding workers accountable to the company’s health and safety policy and program, as well as to applicable regulatory requirements.
The main objective of a disciplinary program is to ensure that rules and safe work practices are taken seriously by all employees, and that they are followed. When disciplinary action is deemed appropriate, it should be conducted in a timely manner. Trying to conduct a disciplinary response to unsafe behavior by waiting only allows a habit to become more ingrained.
Discipline should be positive, not punitive or negative. The goal is to correct the problem, action or behavior. The type of discipline should fit the severity of the misconduct, and it should be conducted in private.
Five-step disciplinary program process
- Reviewing policy and procedures (managers and supervisors).
- Investigation of accusations and infractions (supervisors and safety and health reps).
- Determining and reviewing disciplinary action (supervisors and safety and health reps).
- Documenting disciplinary actions and program enforcement (supervisors and safety and health reps).
- Conducting disciplinary meetings and promoting safe work practices and compliance to regulatory requirements (supervisors and safety and health reps).
If your company hires subcontractors, they should also be required to comply with your health and safety policy.
Sample disciplinary action
You should make it clear that the company reserves the right to discipline employees who knowingly violate company safety rules or polices. Disciplinary measures will include, but not be limited to:
- Verbal warning (documented) for minor offenses.
- Written warning for more severe or repeated violations.
- Suspension, if verbal and written warnings do not prove to be sufficient.
If none of the above measures achieves satisfactory, corrective results, and no other acceptable solution can be found, the company will have no choice but to terminate employment for those who continue to jeopardize their own safety and the safety of others.
Non-punitive discipline
The first step of formal non-punitive discipline is to issue an oral reminder, with the manager’s primary goal being to gain the employee’s agreement to solve the problem.
Should the problem continue, the manager moves to the second step – the written reminder. Together, the manager and the worker create an action plan to eliminate the gap between actual and desired performance.
If disciplinary discussions have failed to produce the desired changes, management then places the individual on a paid, one-day “decision-making leave.” Tenure with the organization is conditional on the individual’s decision to solve the immediate problem and make a “total performance commitment” to good performance on the job.
The employee is instructed to return on the day following the leave with a decision either to change and stay, or to quit and find more satisfying work elsewhere.
Thus, the purpose of the disciplinary transaction has changed from a punishment method to a process that requires individuals to accept responsibility for their own behavior, performance and continued participation in the enterprise.
Insurance That Helps You Survive Another Business’s Disaster
In October and November of 2011, floods inundated large parts of central Thailand, including thousands of factories that made everything from automotive parts and hard disk drives to eyeglass lenses and air conditioners. In addition to the human and economic cost in Thailand, the disaster affected businesses around the world.
Carmakers in Detroit shut down because they could not get the parts they needed and half of the world’s hard disk drive production was wiped out, leaving computer manufacturers with stalled assembly lines. When disasters like this occur, businesses around the globe feel the effects.
In addition to making advance arrangements for alternative suppliers, businesses can protect themselves by purchasing two types of insurance coverage: Contingent business interruption, and supply chain insurance.
Contingent business interruption
Contingent business interruption insurance, also called business income from dependent properties, pays for a business’s lost profit plus continuing expenses when it must slow or stop operations because of damage to another business’s property.
These other businesses can be customers or suppliers. For example, if a motorcycle dealership was left with no bikes to sell because its supplier in Japan suffered a fire, the insurance would make up part of the lost income.
The damage must result from a cause of loss that the insurance policy covers, such as fire or a hurricane. This is important because standard property insurance policies do not cover losses caused by catastrophes such as floods and earthquakes.
Supply chain coverage
Supply chain insurance takes contingent business interruption a step further. It covers income lost because of damage to a supplier’s or customer’s property. However, it also covers losses resulting from events that do not cause physical damage. These may include:
- Labor disruptions
- Production process problems
- Trade disputes
- Wars
- Political turmoil
- Closed roads, bridges, railroads and shipping channels
- Public health crises
- Actions by regulators
- Financial difficulties
Businesses often have different tiers of suppliers, with key suppliers in the top tier and less important ones in the lower tiers. It is common for them to insure only the top tier.
However, insurers are increasingly offering multi-tier coverage. This applies to the business’s entire supply chain. Multi-tier coverage provides a more comprehensive solution for the business while also spreading out the insurer’s risk.
Some insurers offer options. One lets policyholders choose between measuring losses in terms of gross earnings or number of units from the supplier. Some also offer agreed-value coverage, which eliminates penalties for buying amounts of insurance less than the amounts of value at risk.
Businesses should determine where they are vulnerable to supply chain losses and develop back-up plans for dealing with unexpected disruptions. These could include reserves of the needed supplies and contracts with alternative suppliers.
Insurance can help the business recover from a supply chain loss after the fact. Advance planning can help make that loss as small as possible.
If you would like to know more about business interruption insurance, don’t hesitate to contact us.
Keeping it Safe, and Limiting Liability During Holidays
With year-end festivities about to begin, you should include safety into your holiday plans, be that if you are simply decorating the office or throwing a holiday/year-end party for your staff.
While you obviously want your staff to relax and have fun at your holiday party, you also want to make sure they get home safely and that nobody gets hurt or sick at your party.
Some of your safety priorities should be
- Liquor consumption,
- Safety on the premises of your party, and
- Food-borne illnesses.
Due to their infrequent nature, the liability risks of company-sponsored holiday events are often overlooked. To ensure the health and well-being of all who attend, it is important to be aware of any potential liability concerns that your company may face if the event doesn’t go exactly as planned.
Safety
While you want your staff to enjoy themselves, safety should still be your top priority during the holidays.
Keep in mind that if someone trips and injures themselves on an extension cord for your holiday lighting or other holiday decorations, it would be considered work-related and could possibly be subject to workers’ compensation. The same may hold true for injuries sustained at work parties as well. Consider the following:
- If you are holding a party at outside your office, inspect the venue first to make sure it meets your safety standards. Some things to keep an eye out for include: exits emergency lighting, and flooring that might prevent slips and falls, particularly if there is a chance of bad weather.
- Keep an eye on the weather forecast and if storms are looming on the date of your party. Consider the effects that weather may have on safe travel to and from the party.
- Do you need security?
- If party-goers are leaving at night, make sure nobody has to walk out alone in the dark to their car for safety reasons.
- Use food safety best practices like keeping hot foods warm and covered and not leaving perishable food out for too long to reduce the chance of someone getting a food-borne illness.
- Have an emergency plan in case someone is injured or needs medical assistance. Know where the closest hospital is and if anyone knows how to use a defibrillator or can perform CPR.
Risk and potential liabilities
You’ll want to minimize the chances of being sued for actions related to the event.
- Prior to the event, remind your employees that rules against harassment, discrimination and conduct apply at the event as well and infractions will be dealt with as you normally would.
- Monitor behavior at the event, as if people are drinking, they may act in ways that they normally wouldn’t. Take prompt action if any activity or behavior exceeds acceptable bounds.
- Make the event optional for your workers and let them know that it won’t reflect poorly on their performance evaluation, advancement potential or job security if they don’t’ attend. Emphasize this in all invitations and announcements should emphasize this point.
- Limit alcohol consumption.
- Avoiding activities or items such as mistletoe or inappropriate music that could lead to physical contact, unwanted social pressure or inappropriate conversation.
- Taking complaints that stem from the party seriously. As you would with any other incident, document, investigate and take appropriate action.
Alcohol
Some companies have recognized the liability exposure that alcohol represents and have chosen to hold holiday events free of beer, wine, or liquor. If it will be served, there are some important considerations that can help to limit potential problems:
- Hold the event at an off-site location and hire professional bartenders who have their own insurance and are certified for alcohol service. Speak with the vendor to determine what protocols it uses to keep from serving minors and others who are visibly intoxicated.
- Provide an array of choices of non-alcoholic beverages.
- Don’t have an open bar. Instead hand out a set amount of drink tickets to control consumption (two is usually a standard amount).
- Stop serving alcohol at least an hour before the event ends.
- Give a supervisor or manager the authority to cut off anyone who is intoxicated.
- Provide alternative transportation that may include free cab or Uber rides.
A word about insurance
Make sure you that any vendors you use, carry insurance. Insist on seeing the certificates of insurance with sufficient coverage and liability limits for:
- Catering firms,
- Bartending firms,
- Facilities, or
- Entertainers should be required to produce
When reviewing rental contracts, be sure to note any hold harmless or indemnity agreements that could release the vendor from liability and instead hold your company responsible for losses from situations over which you have no control.
Also, talk to us to make sure that your own insurance policies cover any mishaps that may occur at your company event.
How to Rebuild on Time After a Commercial Property Claim
For businesses that suffer property damage, getting repairs or rebuilding completed on time and within budget is becoming an uphill battle.
A mix of inflation, supply chain challenges leading to material shortages, a tight construction labor market and the inherent complexity of commercial construction have pushed costs higher and stretched timelines longer. This can leave a company unable to operate or producing revenue at only partial capacity while they wait.
As the problem worsens, it’s important that property owners have a strategy to jump-start repairs through planning and by establishing a network of contractors in advance.
Why repairs are taking longer and costing more
Multiple forces are converging to make commercial reconstruction increasingly difficult to complete efficiently:
- Persistent inflation — Verisk reports that commercial reconstruction costs rose 5.7% year over year through the second quarter of 2025, with concrete prices jumping by more than 9%.
- Supply chain disruptions — Tariffs on imported materials, supply chain issues and transportation delays are further inflating prices and lengthening delivery times. It’s not uncommon for a project to be delayed for months because of part shortages.
- Labor shortages — Nearly 900,000 skilled trade positions remain unfilled nationwide, and many contractors are struggling to meet demand for work.
- Complex project requirements — Commercial construction is far more intricate than residential work. Unlike a home, a commercial property may include multiple systems such as HVAC, fire suppression, medical gases, industrial machinery or commercial kitchens, all of which must meet strict codes and specialized standards.
- Local contractor limitations — Contractors accustomed to routine maintenance may lack the expertise or workforce to manage large-scale reconstruction, leading to delays as businesses search for more capable contractors.
The risk multiplies after natural disasters
After natural disasters, these problems are compounded. Local labor, materials and equipment become scarce almost immediately after a disaster, as affected businesses vie for the same resources.
In these situations, unprepared property owners can end up paying steep premiums for scarce labor or settling for subpar work just to reopen sooner. Insurers face their own exposure as delayed repairs prolong business interruption claims and push overall loss costs higher.
Steps property owners can take
While these challenges are significant, property owners can take practical steps to mitigate repair delays and inflated costs when filing commercial property claims.
Build a broader, pre-vetted contractor network — Relying solely on local contractors can backfire after a catastrophe.
Developing relationships with a wider network of pre-qualified commercial restoration firms ensures capacity and capability when demand spikes. A vetted network also allows property owners and insurers to match each job to the right expertise rather than defaulting to whoever is available.
Use time-and-material pricing models — Traditional fixed-price contracts can create inefficiencies and inflated costs when project scopes shift. A time-and-material model charges based on actual labor hours and materials used, which in turn offers transparency and flexibility.
This approach also allows for detailed tracking and frequent review of expenses so both owner and contractor understand exactly where costs are going. According to Verisk, smarter review models based on time-and-material data can cut inflated commercial repair bills by 20% or more.
Establish pre-loss agreements — Pre-loss agreements set expectations in advance by outlining pricing frameworks, response times and emergency protocols before a loss occurs.
By having these contracts in place, property owners can mobilize resources immediately after a loss without wasting time negotiating terms. This proactive planning is particularly valuable for multi-site operations or organizations located in catastrophe-prone regions.
Emphasize proactive project management — Active oversight keeps contractors accountable, coordinates multiple trades and helps ensure the contractor stays on schedule. This requires someone on the team to regularly check on work progress.
Whether through an internal facilities team, a dedicated project manager or virtual monitoring tools, close supervision helps ensure the repair process stays on course and minimizes costly delays.
Workplace Incivility, Violence Costing Businesses Billions
American workplaces are facing a growing civility crisis that is costing companies dearly.
According to new research from the Society for Human Resource Management (SHRM), rudeness and discourteous behavior are costing U.S. businesses an estimated $2.1 billion every day in lost productivity, absenteeism and disengagement. The problem doesn’t stop at rudeness: a separate study shows a sharp rise in workplace violence, suggesting that incivility and more serious misconduct are increasingly intertwined.
For employers, both studies should be a wake-up call to address incivility, bullying and other actions that can destabilize the workplace and possibly lead to lawsuits if severe enough.
SHRM’s Civility Index found that U.S. workers collectively experience 208 million acts of incivility each day, from curt emails and dismissive tones to eye-rolling or gossip. While these behaviors might seem minor in isolation, they add up to staggering losses.
Where incivility goes unchecked, managers in SHRM’s study reported:
- Lower psychological safety,
- Weaker team cohesion, and
- Diminished trust.
SHRM pointed to the following as major drivers of the trend:
- Political polarization,
- Residual pandemic stress, and
- “Digital bravery,” the tendency to say things behind a screen that one would never say face-to-face.
The effect, according to SHRM Chief Human Resources Officer Jim Link, is a workplace culture where even routine communication is more easily perceived as hostile.
From incivility to violence
While rudeness doesn’t always lead to violence, patterns suggest the two are related.
Traliant’s 2025 Employee Survey on Workplace Violence and Safety found that 30% of workers witnessed workplace violence in the past year, up from 25% in 2024. Fifteen percent said they had personally been targeted, up from 12% in 2023. Industries like hospitality and health care were particularly affected.
The overlap matters for employers. A culture that tolerates disrespectful behavior can erode trust and embolden more extreme actions. Even if uncivil acts are not illegal, they create a climate where violence, harassment or retaliation is more likely to emerge.
Preventing incivility at work
Drawing from SHRM’s recommendations and best practices, here are practical strategies employers can use to address problems before they escalate:
- Set clear expectations: Define what respectful behavior looks like in your organization and communicate consequences for violations.
- Provide communication training: Help employees navigate disagreements without crossing the line into hostility.
- Model civility at the top: Leaders who practice respect and professionalism set the standard for everyone else.
- Promote open dialogue: Encourage feedback and ensure employees feel safe raising concerns.
- Recognize positive behavior: Reward and acknowledge employees who contribute to a healthy workplace culture.
- Offer anonymous reporting: Give employees safe channels to flag issues without fear of retaliation.
- Invest in inclusivity and mental health: Unconscious biases and cultural misunderstandings can fuel incivility at work. Inclusivity training can help educate employees about biases and cultural competency to reduce misunderstandings.
- Use de-escalation techniques: Train managers to calmly defuse conflicts before they spiral.
Takeaway
For executives, the message is clear: incivility is not just an HR problem, it’s a bottom-line issue.
A disengaged workforce translates into lost output, higher turnover, reputational risk and in severe cases costly litigation. Unlike external market conditions, workplace culture is something leaders can directly influence.
Liability, Large Court Verdicts Drive Commercial Auto Insurance Price Surge
Commercial auto insurance companies continue to post steep losses for liabilities like third-party injuries and property damage, which is driving continued rate hikes for businesses, particularly fleet operators, according to a new report from A.M. Best.
The line posted its 14th consecutive year of underwriting losses in 2024, with liability coverage alone accounting for $4.5 billion in red ink. Those losses were slightly offset by physical damage coverage (part of a comprehensive package), which logged a $1.5 billion underwriting profit for the industry last year.
As losses mount, some commercial auto insurers have left the market and those that remain have tightened underwriting standards, making renewals and securing new policies more difficult.
Commercial auto renewal rates jumped 8% in the second quarter of 2025 from the same period the year prior, according to Ivans Insurance Services. During the last few years, rate increases have averaged 10% or more, but sometimes policyholders are hit with a much larger increase as their insurer must catch up to rising costs.
Even businesses with few claims are seeing significant rate hikes and tighter underwriting, meaning no organization can escape the growing exposure in case one of their drivers is in an accident.
What’s driving the trend
Social inflation and nuclear verdicts: Courts are awarding increasingly larger jury verdicts, and plaintiffs’ attorneys are more aggressively pursuing cases and pushing for trials over settlements, emboldened by favorable outcomes. This has led to more frequent and severe claims that outpace rate increases.
As well, third-party litigation funding is becoming more common, with external investors bankrolling lawsuits in exchange for a share of the settlement.
Vehicle repair costs: Modern vehicles are packed with sensors, cameras and advanced safety systems. Repairs require specialized parts and skilled technicians, many of whom are in short supply. The imbalance between demand and available workers has pushed labor costs higher.
Longer repair times: Parts shortages and limited repair shop capacity have stretched out repair timelines. The longer a claim stays open, the greater the legal exposure and ultimate settlement cost, according to A.M. Best, which estimates the commercial auto insurance industry to be under-reserved by $4 billion to $5 billion.
Driver shortage: As more experienced drivers retire, the labor crunch has meant fewer available drivers and more newbies, which can strain operations and increase risk, including:
- Higher accident rates
- Greater pressure to cut corners
- Inadequate training and mentorship
- Risk of driver fatigue
Shrinking insurer appetite and the rise of E&S coverage
As losses mount, many traditional “admitted” carriers are pulling back from commercial auto risks. This reduced capacity has forced some businesses to turn to the excess and surplus market for coverage.
E&S carriers historically focused on unusual or higher-risk accounts that standard insurers avoided. But today even businesses with relatively typical auto exposures are finding themselves placed with E&S carriers. While these insurers fill a critical gap, their premiums are usually higher, and terms can be stricter.
What you can do
Focus on safety: Instill a strong safety culture from the top down and invest in driver training. Require all drivers to check their vehicles before each shift and leverage telematics to track driver behavior.
Stay proactive with repairs: Build relationships with qualified repair shops to reduce downtime.
Work closely with us: We can explore options across both admitted and E&S carriers to ensure you have the right protection at a competitive rate.