California Workers Compensation Insurance

If an employer has even one employee they are required by California law to have workers compensation insurance. Roofers may need workers compensation coverage even if they have no employees. Out-of-state employers also have to carry compensation insurance if an employee is employed in California on a regular basis or a contract of employment takes place in California.

Consultation with your insurance agent, attorney, or carrier regarding your individual situation is recommended but insurance for sole owners is usually optional. However, workers compensation insurance is mandatory for any employees in the state of California, even if you have even one employee whether full-time or temporary.

Consultation with your insurance agent, attorney, or carrier regarding your individual situation is recommended. All employees of the company must be included in the policy (including corporate officers and directors) unless they are the sole owners of the company. Sole owners have the option of electing not to be covered.

The annual premium is determined by many factors. These include your industry classification, history of work-related injuries (experience modification), payroll, or special underwriting adjustments such as use of a certified health care organization, and any special group or dividend programs for which you may be eligible.

The California state labor commissioner determines if an employer is operating without California workers compensation insurance and will place a stop order. This will forbid the use of employee labor until insurance is acquired. Failure to observe this order is a misdemeanor punishable by incarceration for up to 60 days, or a fine of up to $10,000, or both. The Division of Labor Standards Enforcement may also charge a penalty of $1,000 per employee on the payroll and served, up to $100,000.

If a worker files a claim that before the California Workers Compensation Appeals Board and a judge finds the employer had not secured insurance, the uninsured employer may be fined a penalty of $10,000 per employee on the payroll, or $2,000 per payroll employee at the time of injury if the worker's case was non-compensable, up to a maximum of $100,000.

If you fail to have California workers compensation insurance the offense is considered a misdemeanor, punishable by either a fine of up to $10,000 or imprisonment for up to one year, or both. Additionally, the state issues penalties of up to $100,000 against illegally uninsured employers.

You are then accountable for paying all costs related to the injury or illness. Workers compensation benefits are only covered for job-related injuries if you are correctly insured. If you are illegally without insurance and have an employee claim, the employee can also bring a civil action against you in addition to a workers’ compensation claim.