Who is required to carry workers’ comp?

• All California employers are required to carry workers’ compensation insurance under California Labor Code Section 3700. If a business employs one or more employees, it must have coverage. There are some business owners that elect to carry the coverage just to cover himself/herself, but because workers’ comp is a liability insurance coverage where the employer assumes complete liability for all work-related injuries to employees, a workers’ comp policy for a sole proprietor not always the best choice.

What about self-insurance?

• Self-insurance requires state approval, a net worth of at least $5 million, net income of at least $500,000 per year and a security deposit. In the past, only larger companies would self-insure, but in recent years, some smaller companies in the same industry have been pooling their workers’ compensation liability claims together to self-insure.

How much does workers’ comp insurance cost?

• The state does not regulate workers’ comp insurance prices, however, the Workers’ Compensation Insurance Bureau issues recommended rates. Rates may vary from carrier to carrier.

What determines how much my premium will be?

• There are several factors that go into determining your rates. Your industry classification, your company’s history of work-related injuries (experience modification), payroll, any special underwriting adjustments such as the use of a certified healthcare organization and any special group or dividend programs you may be eligible for.

Can my employees help cover the cost?

• No. Workers’ compensation insurance is a cost of doing business.

What should I do if my employee get sick or injured on the job?

1. Provide workers’ comp claim form to the injured employee within one working day after the work-related injury is reported, and return a copy to the employee.
2. If the employees are covered by a Medical Provider Network (MPN), make sure the injured worker is given a complete MPN employee notification and that the initial medical evaluation is arrange with a MPN physician.
3. Forward the claim form, along with your report of the occupational injury or illness, to the claims administrator within one working day.
4. Within one working day of receiving the employees claim, authorize up to $10,000 in appropriate medical treatment.
5. If the employee is a victim of a crime that happened at the work place, you must give notice of workers’ comp eligibility within one working day of the crime.

What can I do if I think an employee’s workers’ compensation claim is not valid?

• You should report it to your workers’ comp claims administrator. Tell them everything you know, any witnesses you may be aware of and the people they should talk to.

What happens if I’m uninsured and one of my employees is injured?

• Not having 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 up to one year, or both. Additionally, the state issues penalties of up to $100,000 against illegally uninsured employers. If an employee gets sick or injured on the job and you’re uninsured, you’re responsible for paying all bills related to the injury or illness. The employee can also file a lawsuit against you in addition to filing a workers’ comp claim.

Where can I get proof of coverage?

• You can request proof of coverage from your insurance carrier.

We’re always here to help, so give us a call today at 714-245-2777 if you’d like a quote for workers’ compensation insurance. Thank you for reading!