CRMBC Leads Charge Against Rising Insurance Costs for California Restaurants
FRESNO, Calif., Dec. 18, 2023 /PRNewswire/ -- Kaya Stanley, CEO of the California Restaurant Mutual Benefit Corporation (CRMBC), addressed the implications of the Department of Industrial Relations (DIR) recent announcement of an increase in total assessments for 2024 on California's restaurant industry and insurance brokers.
"The DIR's decision to raise assessments to $1.7 billion represents a significant shift in our state's insurance market," said Kaya Stanley. "This development calls for a strategic and well-informed response, particularly from brokers and restaurant owners as we navigate from a soft to a hard market."
Impact on Brokers
Communication of Rate Changes:
Brokers are advised to inform their clients about the latest assessment rate changes. Rates for self-insured employers have been adjusted from 11.8% to 11.1%, while insured employers are experiencing a premium increase of over 6%, representing a 3.3% rise from the previous year. This creates a notable cost difference between insured and self-insured employers, an important consideration in workers' compensation insurance decisions.
Enhancement of Risk Management Consultation
With the insurance market becoming more challenging, it's increasingly important for brokers to offer comprehensive risk management consultations. Organizations like CRMBC can support brokers in this endeavor by providing safety and loss control services, which can benefit those in self-insured groups.
Keeping Pace with Market Trends
Brokers are encouraged to stay informed about evolving market trends, regulatory changes, and industry best practices. Staying updated is crucial for providing informed and realistic advice to clients, especially in a rapidly changing insurance landscape.
New Realities for Restaurant Owners
Reassessing Insurance Options
Given the rise in premiums for insured employers, restaurant owners might consider evaluating self-insurance as an alternative. This decision should be made after understanding the potential benefits and responsibilities of self-insurance.
Increased Emphasis on Safety and Training
The move towards self-insurance necessitates a stronger focus on risk management for restaurant owners. This includes investing in safety training and workplace risk assessments, which are key to managing and reducing claims effectively.
Exploration of Potential Cost Savings
Self-insurance could offer long-term financial benefits through reduced claim frequencies and improved claims management. Historically, this approach has been associated with financial stability and savings in various market conditions.
Echoing Stanley's sentiment, Mike McDonough, SIP, Principal at McDonough Insurance Services, reinforced the value of self-insured groups: "Joining a self-insured group is often the best answer for a broker's client. It provides a financially savvy option and fosters a community of shared risk management and expertise, particularly vital in the restaurant industry."
According to Stanley, the increased DIR assessments necessitate a strategic reassessment of insurance strategies.
"Businesses must carefully weigh the benefits of self-insurance against the changing market conditions and increased costs of traditional insurance," she added.
About California Restaurant Mutual Benefit Corporation
CRMBC is a California Self-Insured Group (SIG) formed BY restaurant owners FOR restaurant owners. Choosing to opt out of commercial insurance that uses premiums to boost their substantial profits and overhead, CRMBC is a group of business-savvy restaurant owners who joined forces to self-insure their work comp for sustainable cost savings.
SOURCE California Restaurant Mutual Benefit Corp
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