Insurance Rates On The Rise For San Fernando Valley Businesses

Insurance premiums for business policies in the San Fernando Valley have risen this year by two to fifteen percent compared to last year, according to David Russell, an associate professor of insurance and finance at California State University, Northridge.

As reported in the San Fernando Valley Business Journal on May 14, 2012, the increase has been caused by a variety of factors, including (i) more catastrophic losses suffered by insurance companies throughout the world, including natural disasters that have reduced the profitability of their property insurance lines, (ii) increased medical costs leading to higher workers’ compensation insurance rates, and (iii) the economic downturn which causes some businesses to cut back on insurance, which in turn causes insurance companies to raise rates on commercial policies to make up for those that generate less premium during the downturn. One type of policy that generates less overall premium in a struggling economy is workers’ comp, since fewer employees need to be covered.

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