California Business Insurance: Getting The Best Quote Possible

Having been in the commercial insurance business for over a decade, I've witnessed firsthand how challenging the California business insurance market has become. Currently, there are fewer insurance carriers actively writing business, premiums are steadily increasing, wildfire concerns have created significant coverage availability issues, and many low-risk businesses now find themselves forced into the excess and surplus (E&S) market—a situation that's far from ideal.

Excess and Surplus (E&S) insurance operates outside of state insurance regulations and is designed to cover risks that standard "admitted" insurance companies won't accept. Unlike admitted carriers, E&S insurers don't have rates regulated by the state, aren't backed by state guarantee funds (which protect policyholders if an insurer becomes insolvent), and can modify coverage terms more freely. For business owners, this typically means higher premiums, potentially broader exclusions, and greater financial responsibility if claims arise. However, E&S markets provide essential coverage options when standard markets withdraw—as we're seeing in California's challenging property insurance landscape.

Despite these challenges, I have several key recommendations that can help you navigate this difficult market in the coming years until conditions improve. Let's explore practical strategies that can protect your business while managing costs effectively.

Key Market Insights and Recommendations

1. Positive Change Is Coming: Carriers Are Returning for Lower-Risk Businesses

For years, we've only heard news about insurance companies withdrawing from California or halting new business in the state. This resulted from multiple factors beyond the scope of today's discussion. However, I'm seeing encouraging signs that the worst may be behind us. We're starting to receive notices that certain insurance companies are beginning to write small business insurance policies in California again! Established carriers like Chubb, The Hartford, and Travelers are once again considering businesses for their best (admitted) products.

2. Strategy for Property Owners: Consider "Unbundling" Your Coverage

If you own commercial property in California, especially in wildfire-prone areas, your property insurance will likely remain with a surplus lines carrier for the foreseeable future. However, don't hesitate to purchase property insurance from one surplus lines company while securing your other coverages (liability, workers' compensation, etc.) from an admitted insurance company.

This "unbundled" approach has been standard practice for years in states with challenging insurance markets like Florida, Louisiana, Oklahoma, and Texas. While the surplus market generally offers less ideal policy terms, these carriers are better equipped to handle higher-risk property policies than admitted carriers.

3. Quality Matters: Avoid Insurance Companies Without an AM Best "A" Rating

California businesses are fortunate not to be pioneers in navigating challenging insurance markets. We can learn valuable lessons from states that have already faced similar situations.

When insurance markets tighten, some unscrupulous carriers enter the market without their customers' best interests at heart. They may include unexpected exclusions in policies, handle claims poorly, and generally tarnish the insurance industry's reputation. This behavior resembles what happens after natural disasters when questionable contractors rush in, perform substandard work, and leave before issues can be addressed.

Action step: Ensure all your carriers maintain an AM Best "A" rating. Insurance companies that undergo this rigorous rating process and emerge with an A rating typically demonstrate financial stability and operational quality.

Pro tip: Consult your agent for their assessment. You and your agent share aligned interests here—if you experience poor claims service, it creates problems for them as well. Reputable agents avoid placing business with unreliable insurance companies.

4. Policy Details Matter: Watch for Changing Deductibles & Exclusions

Traditionally, California has enjoyed very low property deductibles due to the perceived lack of natural disasters. This is rapidly changing. We're now seeing insurance companies implement percentage-based deductibles for wind/hail damage and even introducing specific wildfire deductibles.

What to watch for:

• Percentage-based deductibles (often 1-5% of property value)
• Wildfire exclusions or limitations
• Wind/hail damage restrictions
• "Basic" or "Broad" form property coverage (always purchase "Special")
• Water damage exclusions, deductibles, or sublimits

Action step: Review your policy thoroughly with your agent to ensure your most significant risks are covered. While wildfire exclusions might be acceptable if you knowingly choose to assume that risk, unexpected coverage gaps can be devastating to your business.

5. Research Your Carrier: Many Surplus Lines Companies Have Reputable Backing

Many surplus lines companies operate as subsidiaries of established insurance brands you likely know and trust. Their E&S division might use a different trade name since it operates under different regulatory conditions.

Examples:

• Chubb, a highly-regarded insurance company, operates an E&S carrier called Westchester that writes substantial business in California
• Northfield, a growing presence in California's insurance market, is owned by Travelers, another reputable and trustworthy insurance company

The key is to have an open conversation with your agent about your carrier's financial backing, claims handling philosophy, and protection terms to ensure you feel comfortable with your coverage.

Current Market Pricing Expectations

In 2025, pricing for California business insurance appears to be very stable with minimal increases. Some of our insurance carriers are actually decreasing their rates. The vast majority of rate increases we are seeing occur when customers get non-renewed by admitted insurance companies and are forced to move to non-admitted insurance companies.

For example, many apartment building owners with 4-50 units are currently being non-renewed by carriers such as State Farm that have incredibly low rates, and they're being moved to specialty markets with a 2x rate increase.

Aside from these situations (which usually involve insuring buildings), some customers might see rate increases, but nowhere near the rate that has been seen over the previous 3-5 years.

How to Get a Quote for Your California Business Insurance

At LandesBlosch, we specialize in handling business insurance throughout California and can help you secure comprehensive coverage to protect your business assets and operations. Whether you're a landlord, apartment building owner, retail store operator, technology company, or any other type of business owner, our experienced team understands the unique challenges of the California insurance market and can tailor solutions to your specific needs.

Getting started is simple and convenient:

• Request a callback: Contact us for an immediate response from one of our California business insurance specialists who will assess your needs and provide personalized guidance.
• Get an online quote: For those who prefer digital convenience, complete our online quote form to receive a customized insurance proposal that addresses your business's specific risk profile.

Our team works with a wide range of industries including but not limited to:

• Commercial property owners
• Apartment building investors
• Retail businesses
• Technology companies
• Professional service firms
• Manufacturing operations
• Hospitality businesses

Conclusion

Although California's business insurance market presents significant challenges today, implementing these strategies can help protect your business while managing costs. Work closely with a knowledgeable agent who understands California's unique insurance landscape, maintain vigilance about policy details, and prioritize coverage quality over price alone.

The market is showing early signs of improvement for certain business categories, but property owners will likely face continued challenges for several years. By taking a proactive, informed approach to your insurance program, you can navigate these difficulties while maintaining appropriate protection for your business.