California’s Workplace Violence Prevention Act, also known as SB553, is reshaping labor and workplace regulations across the country. Are American businesses ready for the new mandate?

The law, signed into law last September and effective July 1, requires nearly all businesses operating in the state to have comprehensive violence prevention plans in place. The bill aims to protect employees and create stronger protocols for employers to deal with workplace threats.

Employers in all industries (except health care) with 10 or more employees in California must strengthen their injury prevention program by developing and implementing a written workplace violence prevention plan, providing employee training on workplace violence, maintaining and reporting records, and assigning specific roles to develop and implement this plan.

Organizations with fewer than 10 employees and workplaces that are accessible to the public (such as retail stores) must also be SB553 compliant.

“The changes to the labor law now require all employers to have a workplace violence prevention plan in place,” explained Lucy Straker (pictured right), chair of the US Focus Group – Political Violence and Lethal Weapons Protection at Paisley. “The law affects most businesses across California, or that experience violence in California.”

Compliance with Senate Bill 553 goes beyond documentation and requires a multifaceted, culturally-based approach to workplace violence prevention. Failure to comply has negative consequences.

“It’s not just about prevention, it’s about response and documentation,” said James Rizzo (pictured left), U.S. D&O Product Leader, Beazley.

California SB553 – Compliance Steps for Employers

One of the primary hurdles facing many companies is awareness. Straker has noticed a significant gap in knowledge among industry professionals. At a recent Beazley webinar, she said, nearly half of attendees were unfamiliar with SB553 and its implications, highlighting the urgent need to educate brokers and insureds.

“Among the insurance brokers in attendance (at the webinar), some were familiar with the California law, and some were not. Despite the focus on Senate Bill 553, 45% of attendees were not familiar with the law and its implications,” Straker said. “Many are still initially in denial or unaware of the requirements, which leads them to rush to catch up.”

According to Beazley professionals, compliance with SB553 involves several key components.

First, companies should conduct a comprehensive risk assessment, which means identifying potential hazards and vulnerabilities in the workplace. Second, companies should establish a multidisciplinary team, which is a critical step in developing an effective workplace violence prevention plan. This team should include representatives from various departments, such as security, facilities, human resources, and legal.

Employee training is another cornerstone of S.B. 553 compliance. According to Rizzo, it’s not enough for employers to have a plan on paper; employees need to be well-versed in recognizing and responding to potential threats. Regular training sessions and exercises can help ensure employees are prepared for a variety of scenarios.

“At the very least, I think they should be able to identify threats and be aware of how to respond in the event of a crisis,” Rizzo said.

Documentation and reporting are also critical under Senate Bill 553. Companies are required to keep detailed records of all incidents of workplace violence, no matter how minor. This includes keeping a log of violent incidents and documenting all steps taken to mitigate risks and respond to incidents.

According to Straker, comprehensive documentation not only helps with compliance, but also provides a valuable resource for continuous improvement.

“The plan must be ready at all times, comprehensive, covering all areas of the business, and must be included from top to bottom and bottom to top,” she told Insurance Business.

SB553 Compliance Challenges for Small Businesses

Companies do not need to be headquartered in California to fall within the scope of SB553 as long as they have a presence or exposure there.

However, there are some exceptions, such as health care facilities, law enforcement agencies, correctional institutions, and small businesses with fewer than 10 employees that are not open to the public. Telecommuting arrangements, where the employer does not supervise the facility, are also exempt.

Under California’s Workplace Violence Prevention Act, companies must ensure they cover everything from risk assessments and employee training to keeping a record of violent incidents. These comprehensive requirements are intended to create safer work environments but also pose significant challenges to implementation, especially for small businesses.

“Many companies will be developing these processes for the first time,” Rizzo noted. “These challenges are likely to be greater for smaller organizations than for larger businesses that have established risk management frameworks. However, both small and large companies will be subject to the same standards, making compliance more burdensome for smaller companies.”

Insurance Consequences of Failure to Comply with SB553

Beyond regulatory fines, non-compliance can lead to serious legal and reputational consequences. Companies may face lawsuits for failing to supervise, control, or prevent workplace violence.

For publicly traded companies, violent incidents can lead to stock declines and securities class action lawsuits, underscoring the need for strong preventive measures.

Finally, insurance coverage is a critical consideration for businesses under Senate Bill 553. Straker noted that noncompliance could impact a company’s ability to secure or maintain insurance coverage.

“When companies buy insurance to cover workplace violence and don’t take the necessary steps to comply with Senate Bill 553, what does that look like to the insurance company?” Straker asked.

“It is possible that insurance companies may not provide coverage if businesses do not take steps to comply with SB553.”

What do you think of California’s SB553? Please share your comments below.