The Employer Guide to Workers' Compensation Insurance in CA

If you run a California business with employees, you need workers' compensation insurance to cover the cost of employee work-related injuries. Workers' comp insurance is mandatory in California, even if your company has only one employee. It's also required for employees who regularly work in California, even if your business is based in another state.

Get answers to the most common questions about workers' comp insurance in CA.

Do Freelancers Need Workers' Comp?

Sole proprietors and independent contractors should strongly consider purchasing workers' comp insurance, even if it's not required. If you're injured on the job, this policy can help pay your medical expenses and provide part of the wages you lose while recovering. Your personal health insurance provider might deny a claim related to work, leaving you to pay those bills on your own.

When it comes to workers' compensation insurance in California, it's possible to get an independent contractor waiver, but the burden of proof is on the employer to prove someone is an independent contractor and not an employee.

California contractors and others in a hazardous line of work may be required to carry workers' comp insurance, even if they don't employ anyone else.

What Does Workers' Comp Cost?

The estimated average employer rates for workers' compensation insurance in California are $1.61 per $100 in covered payroll. Workers' comp cost is based on several factors, including

  • payroll
  • location
  • number of employees
  • industry and risk factors
  • coverage limits
  • claims history

How Does Workers' Comp Work?

Workers' comp insurance benefits provide medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits, and death benefits.

While workers' comp is designed to protect your workers, the protection extends to you—the employer—as well.

Providing your workers with insurance protection means they won't need to sue you for injuries or illnesses resulting from the work you do. It also protects you against the legal penalties for not carrying comp.

What are the Penalties for Not Carrying Workers' Comp in CA?

According to the CA Department of Industrial Relations, failing to have workers' compensation coverage is a criminal offense.

Section 3700.5 of the California Labor Code makes it a misdemeanor punishable by a fine and/ or imprisonment in the county jail for up to one year. The fine for not carrying comp can be up to double the amount of the premium you would've paid, but no less than $10,000.

Additionally, CA state may issue penalties of up to $100,000 against illegally uninsured employers.

If an employee gets hurt or sick because of work and you are not insured, you are responsible for paying all bills related to the injury or illness. Contact the information and assistance officer at your local DWC office for further information.

You should be aware that workers' compensation is the only insurance policy designed for employee injuries suffered on the job. If you are illegally uninsured and an employee gets sick or hurt because of work, that employee can file a civil action against you in addition to filing a workers' compensation claim.

What if the Employee is at Fault?

Workers' compensation insurance is designed to cover the cost of work-related injuries, regardless of who was at fault. This means that even if the employee's actions contributed to the injury, they are still entitled to benefits. This is known as a "no-fault" system.

What Entity Oversees Workers' Comp in CA?

In California, workers' compensation insurance is administered by the Division of Workers' Compensation (DWC), which is part of the Department of Industrial Relations. The DWC oversees the workers' compensation system in the state, including setting and enforcing regulations, resolving disputes, and providing information and assistance to employers and employees.

Workers' Comp Posting Requirements

Employers in California are required to post a notice in a conspicuous location informing employees of their rights and responsibilities under the state's workers' compensation system. This notice must include information on how to report an injury or illness, how to obtain medical treatment, and how to file a claim for benefits.

Are There Exceptions to Workers' Comp Requirements?

While workers' compensation insurance is mandatory for most employers in California, there are some exceptions. For example, certain types of businesses, such as sole proprietors and partnerships, may be exempt from the requirement to carry workers' compensation insurance.

Are Other Employee Benefits Required in CA?

In addition to the basic benefits provided by workers' compensation insurance, such as medical care and disability benefits, California employers may also be required to provide additional benefits, such as family and medical leave, disability leave, and pregnancy disability leave. These benefits are separate from workers' compensation insurance but may be required under state or federal law.

Finally, it's important to note that workers' compensation insurance is not the only type of insurance that employers may need to carry. Depending on the nature of their business, employers may also need to carry liability insurance, property insurance, or other types of coverage to protect their assets and minimize their risks. A licensed insurance provider can help businesses understand their insurance needs and create a comprehensive insurance plan that adequately covers their specific risks and liabilities.

Don't let your employees or business go unprotected. Request a workers' comp insurance quote from the California commercial insurance professionals at Aegis Insurance Markets. Request a quote today.




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