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Workers’ compensation insurers and California employers alike have faced new responsibilities for employee safety from July 1, 2024, when legislation aimed at reducing workplace violence took effect. Now that the law has been in effect for six months, perhaps it is a good time to review its essential aspects.

The marks the first time a state has attempted to address the pressing issue of attacks on employees across general industry. It has been several years in the making and, after a COVID-related delay, gained new impetus following the fatal 2021 shooting by a co-worker of nine staff working at a San Jose railyard. (See related article: Preventing Workplace Violence Is Not a One-Size-Fits-All Exercise: Risk Management Experts).

The rules are far-reaching and center on the creation and implementation of written Workplace Violence Prevention Plans (WVPPs). They apply to all companies in the state with only a few exemptions. Healthcare is one of these since stringent requirements for that sector already apply.

At first sight, the legislation may look daunting. It defines “workplace violence” broadly, to include any act of violence or threat of violence that occurs in a place of employment. It also hands workers’ comp insurers responsibility for auditing the WVPPs or enlisting a certified professional to do so. Some commentary has focused on potential liability issues for carriers associated with this oversight role. However, the legislation provides a good opportunity for the insurance industry to demonstrate the value of its services.

Despite the July 1 effective date, many companies are still working to completely fulfill their obligations under the law. The biggest implication for insurers are the resources and training that have been needed to be put in place to help clients comply.

To do so, employers have been establishing, implementing, and maintaining effective written WVPPs including:

• Allocation of responsibility for implementing the plan.
• Employee involvement.
• Communication and training.
• Identification and correction of hazards.
• Incident response.
• Procedures for reporting and investigating incidents.
• Plan reviews.

In addition, of workplace violence hazard assessment, incident logs, and investigations for a minimum of five years, and training records for at least a year.

SB 533 isn’t California’s final response to the workplace violence issue. It is intended as an interim framework while the California Division of Occupational Safety and Health devises new standards and regulations. It must do so by Dec. 31, 2025, for adoption no later than Dec. 31, 2026.

It is up to insurers to help clients keep abreast of any changes to last year’s requirements as the new regulations are enacted.

When pondering the impact on insurers’ costs and on rates, it is important to keep sight of the fact that the legislation is designed to reduce the likelihood of injury or death in the workplace, rather than to make things harder for companies and their workers’ comp carriers.

Current data isn’t available, but in 2022, the Department of Justice reported a worrying increase in fatal and non-fatal workplace violence in the five years to 2019. In total, from 1992 to 2019 across the country.

A total of 454 homicides took place in 2019, which marked a 58% decrease from a peak of 1,080 homicides recorded in 1994. From 2014 to 2019, workplace homicides increased by 11%, according to the .

The US Bureau of Labor Statistics in 2022 published data recording and another 37,060 non-fatal injuries from workplace violence.

Sales and related occupational groups accounted for almost a quarter of all workplace homicides. The second most affected sector was transportation and material moving.

The California bill is expected to be emulated by other states, many of which are to combat workplace violence, according to legal intelligence company LexisNexis. The Californian requirements and any other legislation they inspire are likely to encourage critical thinking when it comes to addressing workplace violence.

In terms of the industry’s new oversight role, many workers’ comp carriers are rising to the occasion. Audits are already part of normal business practices, and insurers are required to conduct or verify safety consultations or carry out claims analyses in states including New York, Pennsylvania, Texas, and Arkansas.

Some of these are much more resource-hungry than the pending California rules. In New York, for example, safety and loss prevention consultations and evaluations for workplaces with payrolls of over $800,000 and an experience modification rate of more than 1.2. (EMRs are used to quantify risk for the purpose of workers’ comp insurance, with the average being 1.0.) Employers that do not follow the law have to pay a 5% surcharge on the manual portion of their workers’ comp premium, with that surcharge rising another 5% for each year of non-compliance.

As for fears that this could spark a wave of lawsuits against insurers if insureds’ WVPPs prove ineffective, or encourage claims on general liability policies, it’s unwise to make blanket predictions. The industry similarly spent a lot of time hypothesizing about possible liability exposures during COVID, but the reality is these situations are complex and nuanced, with their own unique circumstances.

Fortunately, there haven’t been significant additional costs from the resources insurers have deployed to help clients meet their new obligations and to execute our own oversight responsibilities.

“This legislation should help businesses identify their unique exposures and put specific controls in place as protection for these exposures.”

Insurers are expert at adapting to evolving risk and changing regulatory requirements, and will continue to do so.

In terms of workers’ comp rates and carrier appetite for the line of business, there is the theoretical possibility that this legislation significantly reduces workplace violence. If that does, in fact, happen, it could influence lines of business that tend to have higher workplace violence claims, such as school systems.

Time will tell how effective requiring businesses to have a written WVPP that includes employee involvement and job hazard analysis will be.

However, the new law represents a real chance for carriers to burnish their credentials as risk advisory partners rather than merely recipients of premiums and payers of claims.

We all want to end workplace violence, and those insurers that can offer appropriate resources and assist with compliance have a great opportunity to make their mark.

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