California Commercial Insurance Broker BLOG

California Business and commercial insurance trends as I see the California Insurance Market evolve from the perspective of a independent California commercial insurance broker. Industries I have clients in include non-profits, manufacturing, commercial property owners, technology and software to name a few. I'll be discussing the trends in California Workers Compensation, Property Insurance, E&O, Errors and omissions, Directors and officers, D&O, EPLI, and other coverages

Friday, April 16, 2010


California Insurers Battle With DOI over Iran-Linked Investments

Last week, five insurance trade groups whose members do business in California filed an official petition asking whether the California Insurance Commissioner Steve Poizner created "illegal underground regulations" concerning Iranian investments. The just of the regulation is this, as of April 1, 2010 California would no longer credit any investment on an insurer's balance sheet in any of 50 companies that were black listed by California insurance commissioner Poizner. These are companies that do business with Iranian energy, nuclear and defense sectors.

The crux of the argument is that this ruling by the commissioner Poizner could set dangerous precedent in the areas of determining jurisdiction "over non-domestic insurers' statutory financial statements, how the list of 50 companies was created, and a few other points of contention.

Here are a few basic fundamentals that need to be stated before I make my point, Insurance is the foundation that has allow American business to thrive, the banking industry to invest in those companies and for America to become the leader in the industrialized world. Another often unknown fact is that many insurers operate at an underwriting loss but make up that difference through the profitability in their investment portfolio. A simple example of this would be California Insurance Company XYZ took in $1 billion in premium dollars but paid out $1.05 Billion in claims and expenses. This would be an unsustainable method to conduct any business, however the insurance industry reinvests their premium dollars and in this case say the company made 10% on its investments. In this very simplified example, California Insurance Company XYZ net profits would be $500 Million for the year.

In the search for profitable investments insurance companies have made some very poor decisions in the last few years. Insurance companies do fail, but this most round of near failures with billions in government intervention was systemic. In the search for profitability we(the insurance industry) can forget our moral compass. Iran is a country that under its current regime wishes to destroy our partners, and inflict terror through state sponsored events through out the middle east(world?). I do not always agree with every agenda that is handed out by the California Insurance Commissioners office, often because is is a launching point for higher office therefore politically motivated, but this particular action is what the industry need to show American that it is capable of self regulation.

My two cents...

Tim Pine
Commercial Insurance Broker

Sunday, April 4, 2010


7.2 California Earthquake may get property owners thinking earthquake insurance

Today's 7.2 Earthquake is likely to get California property owners thinking about earthquake insurance coverage for their investments. If you have never sought earthquake coverage for our California property you will likely be surprised by the cost and the structure of the policies. The market for earthquake insurance has been hard for a few years now, what that means to policy owners is that earthquake insurance is expensive. We have not seen a significant earthquake event for a period of time, and in combination with other factors in the reinsurance market this has made for a tight market with very expensive premiums. Not only are premiums high but earthquake insurance policies are structured differently than most insurance coverages.

As Senior mortgage Broker Arnaud Dufour accurately pointed out, less than 10% of California's residential and commercial property is currently protected by some form of earthquake insurance coverage.

An example of how most earthquake insurance are structured is as follows, we'll use a $1,000,000 California property. The policy would be structured with a TIV(Total Insured Value) and a high deductible, usually 10% or higher. So in this example the property would have to experience a loss in excess of $100,000 before the earthquake policy would respond. Another surprise for many commercial and multifamily property owners when they seek earthquake coverage is the carriers that offer earthquake insurance coverage, you will not see many names you are familiar with as this is a specialized market.

Biggest Earthquakes in California in the last 30 years.

So where did yesterday's quake rank in recent California quake history (measured by magnitude)?

7.3 - Landers 6/28/92
7.2 - Cape Mendocino 4/25/92
7.2 (estimate) Southeast of Mexicali, Mexico 4/4/10
7.2 Off the coast of Northern California 6/14/05
7.1 Hector Mine 10/16/99
7.0 Honeydew 8/17/91
6.9 Loma Prieta, 10/18/89
6.7 Northridge 1/17/94
6.6 San Simeon 12/22/03
6.6 Off the coast of Northern California 6/16/05
6.5 Off the coast near Eureka 1/9/10
6.2 Joshua Tree 4/23/92
6.0 Central California 9/28/04
5.9 Humbolt County 2/4/10
5.6 Sierra Madre 6/28/91
5.6 San Francisco Bay Area 10/30/07

The earthquake on 4/4/2010 was one of the biggest earthquakes in the last 30 years and we were lucky the energy went northwest of Mexicali toward a less populated area.
Dare to Prepare

Do you know the seven steps to earthquake safety?

1. Secure it now!
2. Make a Plan.
3. Make disaster kits.
4. Is your place safe?
5. Drop, Cover, and Hold on!
6. Check it out!
7. Communicate and Recover!

You can find more information on each of these steps at

Remember, it is never too soon to be prepared or to buy Earthquake coverage for your California property.

To avoid the pit falls in this specialized insurance market you should seek the advice of a California based commercial insurance broker who can guide you through the process. You can also contact me anytime with questions about earthquake coverage at:

Tim Pine
Arroyo Insurance Services
(949) 340-9662


Thursday, February 18, 2010


Zenith Insurance (Workers Compensation Carrier) Get a new Owner -

The breaking news for California business owners this morning is Zenith National Insurance Corp. was acquired by Fairfax Financial Holding Limited. The key note for California business owners insured with Zenith would be, "How will this acquisition affect my workers compensation insurance premiums?". Let's start by looking at how Fairfax valued Zenith, one of the leaders in the California workers compensation insurance market. Fairfax paid a 31.4% premium to acquire Zenith, this means that Fairfax paid a huge premium to acquire Zenith.

Looking at this acquisition form the outside and as a commercial insurance broker I would say that policy holders are very safe to assume that Zenith will continue on the path of provide excellent pricing for California workers compensation for the class codes that fall within their appetite. I would see this more as a validation for The Zenith, that they are out performing many in the market and the future looks extremely strong or both the company and their clients.

If you would like us to provide you with a no obligation workers compensation insurance review for your California workers compensation policy we would be glad to help. You can contact us with our online workers compensation quote form for an immediate response.

Tuesday, December 22, 2009


Business Insurance and the Recession: Helping California Business Survive

Without a doubt the current economy has significantly affected most sectors of the economy from restaurants to manufacturing even California's technology and financial services, every sector has felt the impact of the past few years. As consumer's disposable income has become scarce, the first impact is seen at the retail level which then trickles into the wider economy effect a wide variety of business sectors.

From a commercial insurance stance many businesses are looking to cut cost, in what the industry calls a "soft market", which means rates have bottomed out for most commercial insurance lines. As a commercial insurance broker with access to over 35 markets we may be able to find a better home for your coverage, however this is not the only aspect where a policy can be reviewed coverages altered, reduced, or even eliminated.

As a commercial insurance expert and conduit for these struggling business owners, it is our job to truly review coverage and help reduce insurance expenses. The following are some of the ways that we help our clients reduce risk, reduce premium cost and maximize their coverage:

• Help identify loss control areas to mitigate risk
- The worse thing for a struggling business is to have a claim take place that could be prevented. Your insurance broker is another line of defense game of preventing claims before they occur.

• Review existing current insurance protection. What coverages are necessary for their business?
- It is possible to be over insured, or on the wrong insurance policy or with the wrong carrier and only by reviewing your commercial insurance at least annually can you determine if you are properly positioned.

• What insurance coverages are perhaps non-essential that can be dropped?

• Obtain the best value insurance policy for the lowest cost
- How many markets does your broker have direct access to? Does he understand your business? These are very important factors in determining whether or not your company is being properly presented to the insurance companies.

• Prepare clients for increased loss exposures in areas affected by the recession, such as EPLI, crime and workers’ comp
- EPLI or Employment Practice Liability Insurance and worker's compensation insurance both see increased claims during time of financial insecurity. Employees trend towards filing claims against current and former employers when the prospects of finding a new position are uncertain.

• Discuss premium financing options and help them find it
- Most brokers have options for financing if it is not offered by the carrier.

• Give clients options – obtain comparative quotes – and explain choices, such as lower premiums for less coverage, carrier stability, etc.

My clients count on me to be an insurance consultant. My goal is to help a client in need in these tough times, and when business conditions improve we can both prosper.

Friday, November 20, 2009


How are Employment Practices Liability Insurance rates impacted by recession?

Employment practices liability insurance (EPLI) is an insurance product that provides protection to employers against claims made by employees. The coverage generally includes cases based on wrongful termination of employment; discrimination based on sex, race, age, disability, etc.; sexual harassment; emotional distress, and other similar types of claims. The current recession has created an increased demand in employer practices liability insurance driving up rates.

The recession officially started in December of 2007, but there were severe economic problems at least a year prior to that time. According to statistics by the Equal Employment Opportunities Commission (EEOC), the number of discrimination claims rose in 2008 by 15 percent as compared to 2007. The trend is generally seen as employees lashing out at former employers as a tight job market prevents them from getting alternate employment in a timely manner.

Because of the large number of layoffs and cuts in salary, many employees and former employees become disgruntled and seek legal remedy. In many cases, cuts were made very suddenly because of the sudden collapse of financial and other markets. According to estimates by the EEOC, the number of discrimination claims is expected to rise sharply again in 2009.

The large increase in claims is believed responsible for the rise in employers that are purchasing EPLI policies. Many California businesses have not realized they can protect themselves from lawsuits arising out of wrongful termination claims by purchasing an EPLI policy. The minimum premium for EPL coverage starts at $1,000 and with the average Employment practices liability claim running in excess of $250,000 this coverage seems like an easy way for California businesses to protect themselves.

Furthermore, there are many federal, state and local laws that employees or former employees are using to file suit against employers. The Worker Adjustment Retraining and Notification (WARN) Act is an example of legislation that is currently used in claims against employers. The law requires employers to provide warning to employees before layoffs, and large employers are required to provide two months worth of salary and benefits.

In order to have the broadest possible coverage against such types of claims in an environment of layoffs and pay cuts, employers have been turning to employer practices liability insurance. However, many carriers have been reporting losses are they are increasing costs in order to protect themselves in an increasingly litigious employer liability environment. Although some reports indicate that the overall economic recession may be ending, the jobs recession may last much longer supporting the demand for EPLI coverage and the upward pressure on rates for this type of insurance. Employment Practices liability insurance quotes can be obtained online and if you work with a great insurance broker, ahem, like myself you will get a competitive analysis of market.

Friday, November 6, 2009


Northern California Office in San Francisco

As a commercial insurance broker I have been given a great opportunity to open two offices in California with the newest in San Francisco. Originally based in Orange County, CA I will still maintain an office near John Wayne Airport. Currently my family and I are living in Sonoma and San Francisco is a quick hour commute away. Having never felt like an hour or two of driving was a very big deal I have established relationships from Sacramento to San Jose as geography is only an obstacle if you allow it to be. The commercial insurance field has allowed me a considerable amount of flexibility and I am extremely fortunate that I now have the opportunity to see more of my clients in person.

If you need help with any of the follow please do not hesitate to contact me:

Professional Liability Insurance (E&)
Directors and Officers Insurance (D&O)
Employment Practice Liability Insurance (EPLI)
General Liability, Workers compensation, Business auto

My newest commercial insurance office is located at 315 Montgomery Street
San Francisco, CA 94104.

Monday, October 19, 2009


Foreclosure Trustee Professional Liability Program

Professional Liability Insurance coverage (e&o) is often a misunderstood insurance coverage, especially in niche industries. Take for example the professional liability insurance options in the financial sector and in particular foreclosure process. Unless you have extensive knowledge of the financial industry, how foreclosures are processed and who most of the liability lies with in these transaction you probably would not have any idea what a foreclosure trustee is or where they have liabilty exposures.

I have been working with foreclosure trustees for quite some time and our agency Arroyo Insurance Services has been selected as the affinity Partner of the United Trustee Association. We have special access to a program that provides extended coverages, reduced premiums and higher limits that anything else available in the marketplace.

If you are interested in receiving a quote feel free to contact me at (800) 401-6764 or at


Monday, August 24, 2009


Examples of Employment Practices Liability Claims (EPLI Claims)

Employment Practices Liability Insurance (EPLI) provides coverage for a business from claims that arise from a worker (or certain 3rd parties) when it has been alleged that their legal rights as an employees have been violated. What are these legal rights? Here are a few: sexual harassment, discrimination, wrongful termination, wrongful discipline, breach of an employment contract, negligent evaluation, failure to promote/employ, and derivation of career opportunity. EPLI is a coverage that provide an opportunity for a business owner to insurance against many for the risks inherent in running a business. Employment practices liability coverage is extremely specialized coverage and the forms vary by carrier, you should consult with a professional commercial insurance broker to determine the difference between carriers.

The next question I get is which commercial insurance acrriers offer EPLI coverage?

Here are a few: Admiral, Beazley-USA, Carolina Casualty, Chubb, Great American, Houston Casualty, Philadelphia, Travelers, CNA, Illinois Union, Ironshore, Lloyd's of London, Markel, Navigators, North River, OneBeacon, Zurich and Golden Eagle.

What are some EPLI Claims Scenarios?

Sexual Harassment

A male janitor served his employer with a lawsuit claiming sexual harassment. The claimant alleges that a male manager for the company would regular touch is chest and stomach while uttering sexually suggestive comments. He further alleged that his employer failed to act when notified of these allegations. The employer eventually investigated the claim and fired the manager. This matter cost the janitorial firm over $300,000 to settle.

For an EPLI Quote please refer to our online submission form and we will contact you to follow up.

More EPLI claims scenarios available here:

Tuesday, August 4, 2009


EPL in today's market

The Economy’s Impact on Employment Practices Liability Insurance

The nation’s economy is going through a dynamic shifting. This shifting is creating many shifts and slides in the way business is operated in corporate America and there is an increased need for Employment Practices Liability Insurance. Because the recent change in the economy has temporarily dampened the hopes of some Americans, law suites have been on the rise. Disgruntled employees who have experienced layoffs or the threats of layoffs have fought back by filing an increasing amount of lawsuits against their employers.

Most of these lawsuits have been filed against larger corporations. However, all companies lie at risk of experiencing an increased number of lawsuits. These lawsuits can include false allegations and one sided views of employees that feel that they should not have been layed off while others with less seniority were not. These lawsuits may at face value appear to be invalid but they may be able to open a can of legal worms that could destroy the business financially. Law suites also attempt to destroy the businesses reputation in the community. These lawsuits can be handled easily with EPL insurance.

It is estimated that as much as three out of five businesses will be sued by current or former employees. EPL insurance is needed as soon as businesses start hiring employees. Investors and directors are insisting that EPL insurance be a part of the company’s mainstream coverage. Directors and officers, investors, and business owner can each be held accountable or liable in law suites claiming that employee’s rights were violated. Employment Practices Liability Insurance protects and covers the business and the business owners from claims submitted by employees or ex-employees who are claiming that their rights were violated. This fairly new form of liability insurance is quickly being seen by business partners and investing partners as a crucial coverage for every business both large and small.

The vulnerability to such claims and lawsuits begins at the hiring process. Pre-screening tests may be deemed prejudice, biased or unfair. Extra caution must be taken during this economic shift to insure that all pre-screening and hiring procedures are not by the book. Proper accountability must be enforced as there are so many desperately seeking job opportunities. Even if a claim is proven to be fraudulent it can be costly in both time and money.

Newer firms may be at more of a risk than older firms. To avoid these unwanted law suites create a hiring, firing and discipline procedure that is approved by your lawyer before hiring anyone. The most important safety factor in today’s worry frayed economy is to purchase Employment Practices Liability Insurance. EPL insurance is an important safety factor in today’s economy.

Tuesday, July 7, 2009


Does California's workers' compensation fraud go up when the economy goes down?

Does workers' compensation fraud go up when the economy goes down?

According to the National Insurance Crime Bureau (NCIB) there is a strong link. In April 2009, the NCIB issued a press release stating that the number of suspected fraudulent workers' compensation claims is up 71%.

What can employers do to help protect their businesses?

To help minimize the financial impact of fraud, experienced insurance companies have established anti-fraud programs as part of their claim management process. These programs are most effective when employers actively work with their commercial insurance broker and carriers to identify potential fraud or abuse in their workplace.

What should employers look for?

The red flags, some of which are listed below, help identify activities that have historically proven to be indicators of fraud. If one or more of these indicators is present when an injury is reported, employers should notify their insurance carrier so they can investigate the validity of the claim.

• If an accident or injury occurs late on a Friday afternoon (especially if not reported until Monday) or early on a Monday morning.
• If the accident or injury lacks witnesses, or occurred in an area not frequented by the employee.
• If the injured worker is unusually familiar with the workers' compensation system or terminology.
• If the injured worker is retiring, on probation, involved in a labor dispute, disgruntled, a poor job performer or subject to disciplinary action.
• If the injury complaints are inconsistent with the facts of the accident. • If the injured worker was experiencing financial difficulties prior to submission of a claim and inquiries about a quick claim settlement.
• If the injured worker refuses medical tests or examinations to confirm an injury.
• If the injured worker stays out of work longer than the doctor prescribed.
• If the injured worker protests excessively about a modified position or returning to work and never seems to improve.


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About Me

Title - Commercial Insurance Broker
Company - Arroyo Insurance Services
Email -
Toll Free - (800) 401-6764
Online Quote Form

Commercial insurance broker working at one of the top 20 largest independent insurance brokerages in Southern California, Arroyo Insurance Services.

Commercial Lines Insurance - General Liability, Errors & Omissions, Directors & Officers, Worker's Compensation, Group Health Care options, Products Liability, Employee Benefits & Fiduciary Liability, Employment Practices Liability

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