For California business owners, workers’ compensation insurance is more than another item on the company’s expense list. It is an important part of protecting employees while also helping protect the financial stability of the business.

With California’s workers’ compensation system continuing to face rising medical, claims-adjustment and other costs, now is a good time for employers to review their coverage and make sure their policy accurately reflects their current operations.

The California Department of Insurance adopted a new advisory workers’ compensation pure premium rate effective September 1, 2026. The new advisory rate is $1.65 per $100 of payroll, a 6.6% increase from the 2025 approved rate. This is an advisory rate, meaning individual insurance companies are not required to charge that exact amount and may establish their own rates.

Is Your Payroll Accurate?

One of the first things a business should review is its estimated payroll. Workers’ compensation premiums are generally based in part on payroll and employee classifications. If your business has grown, added employees, changed job duties or expanded into new services, your policy may need to be updated.

Accurate payroll and employee classifications can help prevent surprises during an audit and help ensure that your coverage properly reflects the work your employees actually perform.

Are Your Employee Classifications Correct?

A company’s operations can change over time. An employee who originally performed primarily office duties may now spend significant time in the field, for example. Construction, contracting, manufacturing, transportation and other industries can have particularly important classification considerations.

Business owners should periodically review their classifications with their insurance professional to make sure they accurately describe the work being performed.

Don’t Overlook Workplace Safety

A strong safety program can benefit both employees and employers. Training, documented safety procedures, proper equipment and attention to workplace hazards can help reduce the likelihood of injuries.

Businesses should also review their claims history. Repeated or costly claims may identify areas where additional employee training or safety measures could make a difference.

Review Your Coverage Every Year

California employers with one or more employees generally are required to provide workers’ compensation benefits, subject to applicable rules and exceptions. Coverage may be obtained through a licensed insurance company or, when applicable, through the State Compensation Insurance Fund.

Your business does not stay the same from year to year, and your insurance program shouldn’t simply be renewed without review. Changes in payroll, employees, job duties, locations, equipment and business operations can all affect your insurance needs.

At Morning Star Agency Insurance Services, we help California businesses review their commercial insurance programs and identify coverage considerations that may deserve attention. Workers’ compensation is one important piece of a broader insurance strategy.

If your business has grown, changed operations or you simply haven’t reviewed your workers’ compensation coverage recently, now may be a good time to talk with your insurance professional. Call Morning Star Agency Insurance Services today at 866-546-5598 or complete the quick quote box above, and we’ll make sure you’re business is properly covered. We have many Carriers to choose from, enabling us to offer the lowest premium along with payroll and payment options.

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