The average cost of workers' compensation insurance has been rising across the U.S., but the problem seems to be the greatest in California. The only way for a business to save money on workers' compensation costs is to layoff workers. Escalating prices are blamed on a turbulent industry market and increases in medical costs. Some feel that fraudulent claims and unnecessary medical care are what has driven up costs.
See "Cost of Insurance for Work Injuries Soars Across U.S.", Joseph B. Treaster, The New York Times, June 22, 2003