Subscribe to Entrepreneur for $5

Staying Alive

How your business can survive the killer costs of workers' compensation

This story appears in the January 2004 issue of Entrepreneur. Subscribe »

Over the past year, businesspeople have grown increasingly infuriated over a variety of perceived economic problems. High taxes. Politicians' indifference to corporate issues. Deteriorating physical infrastructure. Ultimately, this anger became so strong that it partially led to the termination of Gov. Gray Davis and the installation of Governator .

But despite companies' myriad complaints about the Golden State, when Scott Hauge, president of CAL Insurance & Associates Inc., a insurance firm targeting the small-business market, did a survey of roughly 1,200 Californian entrepreneurs earlier this year, he found their biggest problem wasn't taxes or roads-it was the skyrocketing cost of workers' compensation. Workers' comp premiums in California rose by more than 100 percent in the past two years alone, and insurers paid out nearly $20 billion in comp claims in California last year. "It's the number-one issue [for small companies]," Hauge says.

Continue reading this article - and everything on Entrepreneur!

Become a member to get unlimited access and support the voices you want to hear more from. Get full access to Entrepreneur for just $5.

Entrepreneur Editors' Picks