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Workers' Compensation Insurance in California

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According to the California Labor Code Section 3700, workers' compensation insurance in California is compulsory for all business owners. Designed to protect both the employer and employee, workers' comp insurance pays benefits to injured workers from a fund to which their work has contributed. This minimizes or eliminates legal action and civil lawsuits against the employer while ensuring the sick/injured party receives enough benefits to recuperate and eventually return to work. Continue reading to find out more about workers' compensation benefits and California laws.

Workers' Compensation Insurance in California

Workers' compensation insurance in California isn't just reserved for full-time employees; it also offers a scope of benefits for part-time employees. If you work for a company in California, you are entitled to benefits that cover two-thirds of wages, provided they don't exceed the legal maximum. Employers aren't required to cover independent contractors.

Who Needs Workers' Compensation Insurance in California?

Most employers are required to have workers' compensation, apart from sole proprietors, business owners, volunteer workers and gig and promotional workers. Other job title exceptions may fall under this list. Whether you're a franchise or a small company branch with headquarters out of state, you are still required to have compensation coverage. The fund is also there to protect companies if families of the injured employee decide to sue.

A few workers' compensation benefits include:

  • Medical treatment for workplace injuries or illness to help you return to work
  • Temporary or permanent disability payouts. Temporary benefits include payouts during recovery, and permanent benefits are for a lifetime.
  • Supplemental job displacement vouchers to help support the return to the workplace
  • Death benefits to family

California Workers' Compensation Insurance Requirements

A California LLC must have a minimum of one employee as part of the legal requirements. They can either be part-time or full-time employees. Companies that fail to comply could face fines or even criminal charges.

A company's insurance requirements include:

  • Purchasing the right kind of compensation for your business
  • Informing employees about workers' comp, their rights, and the procedure if something goes wrong
  • Well-positioned posters around the workplace detailing points of contact for assistance in an emergency

In California, your employer doesn't have to be at fault for you to claim.

How Does Workers’ Compensation Work in California?

Now that you're aware of a company's insurance requirements in the workplace environment, it's time to find out the procedures for claiming and how it works.

When the injury happens on-site, you should immediately report it and follow your company's procedures. The formal claim process should start within 24 hours — your company should provide you with this form. The claims form should be submitted together with any reports and witness statements.

Companies are required to authorize up to $10,000 in coverage for medical expenses immediately, as this can help pay for emergency medical procedures and more. Individuals who are recovering from an injury should always be offered the opportunity to take on another temporary role for the company that's more manageable.

Why Is Workers' Compensation Insurance Important?

Workers' compensation can protect both parties by providing enough finances to assist injured employees and preventing legal action from them or their families. With this insurance in place, it can also create a sense of financial stability. Workers' compensation works toward helping individuals get back to the workplace by assisting them financially and covering medical costs, which can create a sense of loyalty and trust among employees.

How Much Does Workers' Compensation Insurance Cost?

The answer to this is dependent on numerous factors:

  • Premiums are high if the payroll is high.
  • Payouts are two-thirds of pretax wages, with a maximum allowable amount.
  • Amounts can vary depending on benefit types.
  • Some workplaces have top-up disability insurance for employees that can help bridge the salary gap.

Get a Free Quote for Workers' Compensation Insurance in California

Contact us today for a no-obligation, free quote to help you get the right kind of insurance to prevent disasters and lawsuits. As a marketplace that connects businesses with a variety of insurance providers, we make it easy to find the right coverage for your specific needs.