-
Workers' compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence
California's Workers' Compensation Act provides an example of a comprehensive state compensation program. It is applicable to most employers. The statute limits the liability of the employer and fellow employees. California also requires employers to obtain insurance to cover potential workers' compensation claims and sets up a fund for claims that employers have illegally failed to insure against.
-
FAQ
What determines how much I’ll pay for my premiums?
My spouse and I are the sole owners of our business. We have no employees. Are we required to obtain workers' compensation coverage?
Are executive officers or directors of the company covered under its workers' compensation policy?
What happens if I’m uninsured and an employee is injured?
Can I be fined for not carrying workers' compensation insurance?
-
What determines how much I’ll pay for my premiums?
A number of factors go into determining the annual premium your insurance carrier will charge. These include your industry classification, your company's past history of work-related injuries (known as your experience modification), your payroll, any special underwriting adjustments such as use of a certified health care organization, and any special group or dividend programs you may be eligible for.
-
My spouse and I are the sole owners of our business. We have no employees. Are we required to obtain workers' compensation coverage?
Generally, coverage for sole owners is optional. You would, however, need to have workers' compensation coverage for any employee you may hire, even if it’s just one employee, and even if it’s just temporary employment. You should consult with your attorney, insurance agent or broker, or carrier regarding the specifics of your situation and your options.
-
Are executive officers or directors of the company covered under its workers' compensation policy?
Generally, all employees of the company, as legally defined, including corporate officers and directors, must be included in the policy unless they are the sole owners of the firm. In the case of sole owners, they may elect not to be covered. Several sections of the California Labor Code must be considered to answer this question. You should consult with your attorney, insurance agent or broker, or your carrier regarding the specifics of your situation.
-
What happens if I’m uninsured and an employee is injured?
Failing to have workers' compensation coverage is a criminal offense. Section 3700.5 of the California Labor Code makes it a misdemeanor punishable by either a fine of not less than $10,000 or imprisonment in the county jail for up to one year, or both. Additionally, the state issues 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 benefits are only the exclusive remedy for injuries suffered on the job when you are properly insured. 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.
If you fail to pay required benefits you may also be contacted by the Uninsured Employers' Benefit Trust Fund