ABC

No one has more opinions about California than people who don’t live in California.

It's so expensive!

The traffic is horrible!

They have earthquakes!

And yes, those things are true, but as someone who was born and raised in California, I'll tell you that none of that matters. I love this state. I'll do whatever it takes to live here forever. It's my home. They will bury me here.

California FOREVER.

But…insurance carriers don’t share my love. In fact, I recently heard a broker make a reference to “ABC”:

Anything But California.

While I usually brush off any criticism I hear about my home, I get why carriers are especially resistant to place coverage here.

The legislative landscape is unpredictable. And carriers do not like unpredictable. We are rolling back statutes of limitations on civil claims. We are creating laws that place more liability on both public and private organizations. Everything IS expensive. Wages are higher than other states, which impacts both worker’s compensation markets (since payroll is the insurable basis for workers’ comp) and liability markets (since higher wages mean higher claims for damages if someone lost time from work due to a bodily injury claim).

And while all of that sounds scary, you should know that California is not something that can be avoided. Why? Because we are the 4th largest economy in the world, which means there's a very good chance that YOUR organization does business in California. Maybe you have a few locations here. Maybe some of your workforce is here. Maybe you have other assets in this state. If you're doing business in California, you're going to need coverage for California.

But remember how carriers feel about California: ABC.

This is why risk management is so important. If you want a decent chance at securing coverage for your organization that you can afford, you need to be able to show that you are a risk worth taking on. Your broker is certainly a critical partner in this venture, but your broker gets their information from YOU. So you need to make sure your broker has good information to give when they go to market for coverage. Your broker needs to be able to go to the carrier and say, “ABC, except for me.”

Your loss history needs to show that you know how to mitigate risks, and if your loss history doesn’t look good, then you better have a darn good plan to turn the ship around because I can guarantee an underwriter is going to want to know what that plan is.

I can’t do anything about the earthquakes, or the cost of living, or why it takes 4-5 business days to drive the handful of miles from the Sepulveda exit on the 105 to the LAX Departure Terminal, but I can tell you how to become the kind of risk that makes underwriters lean in instead of walk away.

California isn’t for the faint of heart. But if you’re here, you're already built different.