Small Business California Finds Employers Still Concerned about Workers’ Comp

March 21, 2006

A recent survey conducted by California Small Business, San Francisco, found that most small businesses are still very concerned about workers’ compensation. In the survey, 83 percent of the respondents consider workers’ compensation a top or high priority issue for their business.

When asked about their rates, 32 percent said their rates had increased a little or a lot; 41 percent said their rates had decreased a little with only 7 percent saying their rates had gone down a lot. Of the remainder, 6 percent said their rates had stayed the same and 14 percent said they didn’t know.

“This tells me that my customers don’t think workers’ compensation reform is improving their bottom line, even though I know the market is much better than it was two years ago,” said Scott Hauge, Cal Insurance, San Francisco, founder of Small Business California and member of the Insurance Agents and Brokers of the West (IBA West).

A similar survey conducted by Union Bank reported that small business owners identified the cost of workers’ compensation as the No. 1 challenge of running a business in California — the third consecutive year it was ranked the top challenge. Although 51.2 percent cited workers’ compensation as their biggest worry this year, that number is down from 66 percent in 2005.

“It’s not surprising that workers’ comp remains a top issue for small business,” said Clark Payan, IBA West CEO. “Our challenge is to work with our clients to help them understand how reform has reduced the rates insurers are charging and ultimately how that will help reduce their costs.”

“Unfortunately, opponents of reform are promoting this misperception as ‘evidence’ to attack the reforms and call for rate regulation, neither of which make any sense,” Hauge said.

The survey was conducted by Small Business California by e-mail during several weeks asking small businesses around the state to rank important issues and gauge their opinion of the state’s economy. Hauge shared the survey with the IBA West, and will formally release the survey results next week

Source: IBA West

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