Blog - Tag: Measured Risk
Bureau Recommends Workers’ Comp Benchmark Rate Hike
California’s workers’ compensation rate-making agency has recommended that average benchmark “pure premium” rates increase by 10.4% for policies incepting on or after Sept. 1, 2026.
The Workers’ Compensation Insurance Rating Bureau cited an increase in cumulative trauma claims as well as rising medical and administrative costs. The filing, if approved by the California Department of Insurance, would be the second consecutive year that the benchmark rate insurers use to price their policies has increased. Last year the DOI approved an 8.1% hike after WCIRB had recommended an 11.2% increase.
The pure premium rate increase has not resulted in employers with few or no workers’ compensation claims paying higher premiums since insurers only use the pure premium rate as a guidepost when pricing their policies. The pure premium rate remains at historical lows and the market is quite competitive.
The 10.4% recommended increase is an average across all the state’s workers’ compensation class codes, and each class will see a different change.
Here’s a look at the cost drivers:
Cumulative trauma claims
WCIRB estimates that 26.4% of all workers’ comp claims filed in the state in 2025 are for cumulative trauma injuries, compared to 15% in 2021. CT claims are not for sudden injuries, but rather those that develop over time through repetitive motions, such as:
- Carpal tunnel syndrome — Often claimed by office workers, data entry personnel and assembly line workers due to repetitive hand and wrist movements.
- Chronic back and neck injuries — Caused by years of lifting, bending, twisting or maintaining poor posture.
- Tendonitis and tendon disorders — Inflammation from repetitive shoulder or arm movements, common in construction, warehouse and food service jobs.
- Shoulder injuries — Rotator cuff tears or bursitis from repetitive overhead lifting.
- Knee problems — Develops from repetitive kneeling, squatting or climbing stairs, frequently seen in plumbers or floor layers.
About three out of every five CT claims are filed after an employee is terminated, according to WCIRB. There is a cottage industry of lawyers who find recently laid-off workers and convince them to file these claims. Adding to the cost: nearly all CT claims are litigated, in most cases from the first notice.
Medical costs
One anomaly in CT claims is that they usually have few medical costs in the first year, which masks the growing issue of rising medical costs for workers’ comp claims. According to WCIRB, average medical costs per claim increased 1.7% between 2021 and 2023, but excluding CT claims, that number rises to 3%.
Associated medical-legal costs are up 14% per claim in 2025, while medical equipment and other medical services costs jumped 7% in the same period.
Claims adjusting costs
The high litigation rates for CT claims are seeping into the cost of adjusting claims, according to WCIRB. It projects that insurers’ loss adjustment expense ratio (the cost of adjusting claims) will increase to 37.7% of claims costs, up from 35.7% in the Sept. 1, 2025, filing.
The total cost of claims adjusting increased from $12,636 per claim in 2024 to $14,235 in 2025 and is expected to rise 5.5% annually between 2026 and 2028 to $16,184.
The takeaway
The Rating Bureau has sent the rate recommendation to the Department of Insurance, which will hold a public hearing in the coming months, after which the insurance commissioner, with input from the public and department actuaries, will either accept the recommendation or order a different rate.
While the workers’ comp market is expected to stay competitive, the rate recommendation could portend moderately increasing rates in the coming years.
A New Cyber Security Threat Businesses Cannot Ignore
An allegedly Chinese state-sponsored hacker campaign dubbed “Salt Typhoon” has infiltrated major cell phone providers, including AT&T and Verizon, potentially exposing your company’s communications to threat actors.
The attack has been described as the most significant telecommunications hack in U.S. history. While the breach is alarming for individuals, the implications for businesses are profound and demand immediate attention.
What is Salt Typhoon?
Salt Typhoon is a sophisticated cyber-espionage operation allegedly orchestrated by the Chinese government. The campaign has targeted vulnerabilities in telecom providers’ infrastructure to access text messages, monitor communications and extract sensitive metadata.
The ongoing breach has affected at least eight major U.S. telecom companies and poses a severe threat to national security and corporate privacy.
Potential dangers to businesses
- Exposure of sensitive informationText messages often contain business-critical details, such as contracts, client discussions, or even login credentials. If these communications are intercepted, companies risk financial loss, reputational damage and legal consequences.
- Corporate espionage
Competitors or foreign entities gaining access to a company’s internal strategies could result in lost market advantages or intellectual property theft.
- Regulatory and legal repercussions
Many industries are subject to strict data protection laws. A breach exposing customer or employee information could lead to fines and legal actions under regulations such as GDPR or CCPA.
- Erosion of trust
Business partners and clients may lose confidence in a company’s ability to safeguard information, leading to strained relationships and loss of business opportunities.
Government warning
In response to the Salt Typhoon campaign, the U.S. government issued strong recommendations for using end-to-end encrypted communication platforms.
Unlike standard text messaging or phone calls, end-to-end encryption ensures that only the sender and recipient can read the messages, preventing interception even if a network is compromised.
Apps like WhatsApp and Signal, and corporate platforms such as Microsoft eams and Zoom with encryption features have been singled out as secure alternatives. In contrast, traditional SMS and non-encrypted messaging services remain vulnerable.
For businesses, adopting these recommendations is a necessity. The FBI and the Cybersecurity and Infrastructure Security Agency have emphasized that sensitive communications must migrate to encrypted platforms to mitigate risks from ongoing cyber threats.
Protecting your firm
Protecting your business from the fallout of attacks like Salt Typhoon requires a multi-layered approach. Here are some critical steps:
- Use encrypted messaging: In light of the official recommendations above, shift all internal and external communications to end-to-end encrypted platforms such as Signal or WhatsApp, or enterprise solutions with encryption features.
- Eliminate SMS-based authentication: Avoid using text-based, one-time passwords for authentication; instead, deploy hardware security keys or app-based authenticators.
- Update systems regularly: Ensure all devices and software are updated to patch known vulnerabilities.
- Train employees: Conduct regular cyber-security training to educate employees about phishing, secure communications and device management.
- Limit data access: Implement least-privilege access controls to restrict sensitive data to only those who need it.
- Conduct security audits: Regularly audit your infrastructure for vulnerabilities. Engage third party experts to perform penetration tests and simulate attacks to identify and address weak points.
Finally, you should have in place a robust cyber-insurance policy, which can help mitigate the financial impact of a breach. A comprehensive policy should cover:
- Forensic investigations
- System remediation and restoration
- Legal and regulatory compliance
- Business interruption losses.