California’s Business Insurance Market Is Changing Fast — Here’s What Every Business Owner Needs to Know in 2025

If you own or operate a business in California, you’ve likely felt the shift in the insurance market over the last few years. As a commercial insurance broker with almost two decades years of experience, we’ve never seen the market move this fast — or impact business owners this directly.

Premiums are rising, carriers are tightening underwriting standards, and many businesses are being forced to rethink how they purchase insurance, who they work with, and what coverage they truly need. At Shield Point, we help business owners navigate these challenges with clarity, strategy, and a focus on long-term protection… not surprises.

Below are the biggest trends shaping California’s commercial insurance landscape right now — and what they mean for your business.

1. Premium Increases Across Nearly Every Industry

Let’s address the big one first: most businesses are seeing premium increases — even those with clean loss histories.

Across the state, carriers are raising rates due to:

  • Increased claim severity
  • Rising labor and material costs
  • Higher jury verdicts in liability cases
  • Catastrophic past fire losses and water damage trends
  • Reinsurance costs increasing globally

What this means for your business:
If you haven’t had your program remarketed in the last 12 months, you may be overpaying. Working with an independent broker gives you access to multiple carriers — not just one option.

2. Certain Industries Are Facing Stricter Underwriting

Some industries are being flagged as “higher risk” and facing tighter underwriting guidelines:

  • Construction & Contractors
  • Janitorial & Cleaning Services
  • Hospitality (restaurants, bars, hotels)
  • Manufacturing
  • Auto Services & Dealers
  • Commercial Property Owners

Carriers want more documentation, better safety controls, and clean financials.

What this means for you:
A good broker prepares you before submission — packaging your business to underwriters in a way that improves acceptance and pricing. Most declines happen simply because the application isn’t positioned well.

3. Property Insurance Is Getting Harder to Place

California property has become one of the toughest segments in the country. Carriers are pulling back because:

  • Fire risk in many counties
  • Rising water damage claims
  • Aging buildings and outdated electrical/plumbing
  • High repair and replacement costs

Even well-maintained buildings are experiencing increases or non-renewals.

What this means for your business:
If you own property, it’s critical to review coverage valuations. Many buildings today are insured far below true replacement cost — which can lead to penalties or partial payouts after a loss.

4. Workers’ Compensation Is Still Stable… For Now

California has maintained one of the more stable Workers’ Comp markets compared to other lines. Rates have been trending slightly downward, but claim costs continue to climb.

The largest concerns today:

  • Increased medical treatment costs
  • Rising severity of injury claims
  • Employee fraud cases
  • Lack of return-to-work programs

What this means for your business:
A strong safety plan and good claims management can significantly reduce long-term comp costs — something most business owners don’t realize.

5. Cyber Liability Is No Longer Optional

Cyber attacks on small and mid-sized businesses have skyrocketed.

In California alone, businesses are facing:

  • Ransomware targeting payroll and accounting systems
  • Email takeover scams
  • Data breaches and HIPAA violations
  • Payment diversion and vendor fraud

Yet cyber insurance remains the most overlooked policy in the market.

What this means for your business:
Even a basic cyber policy can save you hundreds of thousands of dollars in a worst-case scenario. If you collect any customer or employee data, you’re exposed.

6. Certificates of Insurance (COIs) Are Becoming More Complex

Vendors, landlords, GCs, and franchise groups are now requiring:

  • Broader Additional Insured wording
  • Primary & Non-Contributory language
  • Waiver of Subrogation
  • High-limit umbrellas
  • More endorsements than ever before

What this means for your business:
If you’re providing COIs, you need a broker who understands contracts. One wrong endorsement can leave you personally liable.

What California Businesses Need Now More Than Ever

In a tightening market like this, business owners can’t afford:

  • Poor coverage structure
  • Overpriced policies
  • Missed carrier opportunities
  • Slow or unresponsive brokers
  • Incorrect certificates
  • Gaps that only show up during a claim

This is why working with an independent commercial broker matters.
You deserve someone who understands your industry, your contracts, and the California market — not someone who quotes whatever’s easiest.

How Shield Point Helps Your Business

At Shield Point Insurance Services, our goal is simple:
Protect your business today, and secure it for tomorrow.

Here’s what that looks like in practice:

  • Comprehensive remarketing with multiple carriers
  • Honest explanations of rising premiums and how to reduce them
  • Fast, accurate COIs for your vendors and contracts
  • Coverage reviews to eliminate gaps
  • Step-by-step support during claims
  • Industry-specific solutions for construction, manufacturing, real estate, janitorial, auto services, and hospitality

When the market gets tighter, strategy matters.
And with our extensive years of commercial insurance experience here in California, we help businesses navigate these challenges with confidence.

If You’re Concerned About Rising Insurance Costs… Let’s Talk

Whether you’re shopping your renewal or simply want to understand what your options look like, we are here to help.

Let’s review your program, explore your options, and make sure your business is properly protected in 2025.

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