What Businesses Are Required to Carry Workers’ Comp Insurance in California?
Knowing whether or not your business is required to carry Workers’ Compensation insurance is important, as failure to do so when necessary can be extremely detrimental to employers in California.
In California, most businesses will need Workers’ Compensation. Whether your policy has to cover all workers will depend on the type of work they perform and whether or not they are compensated. Businesses must start carrying Workers’ Compensation from day one, as having coverage is mandatory at all times. Carrying workplace liability insurance will provide your business with much-needed protection from civil action from workers and penalties from the Division of Labor Standards Enforcement. Companies that do not carry the necessary Workers’ Compensation insurance will likely be fined considerable amounts in California.
Call our California Workers’ Compensation insurance brokers at (866) 340-9120 to get started finding coverage from NPN Brokers today.
Are All Businesses Required to Carry Workers’ Comp Insurance in California?
California has some of the strictest requirements for Workers’ Compensation, mandating almost all businesses to have workplace liability insurance coverage. There are very few circumstances in which a business operating in California would not need to have Workers’ Compensation.
Any company that has employees needs Workers’ Compensation in California. This includes very small companies with even a handle of workers. This rule for having workplace liability insurance applies to businesses in all industries, from construction to retail.
Only in certain circumstances can some workers be exempt from a company’s Workers’ Compensation policy. For example, executive officers and directors of corporations may not be included in Workers’ Compensation policies, provided they own the company entirely. Otherwise, they must be included in a company’s plan. There are also complicated rules regarding Workers’ Compensation for sole proprietors.
To learn whether or not you need to provide coverage for certain individuals, make sure they are classified correctly. Unpaid interns and volunteers do not need to be included in a company’s Workers’ Compensation policy. Additionally, independent contractors hired by a business may not be eligible for Workers’ Compensation benefits in California. Generally speaking, however, every business has to maintain a Workers’ Compensation policy at all times, lest they risk being subject to various penalties for non-compliance.
When Do Businesses Have to Start Carrying Workers’ Comp Insurance in California?
There is no grace period during which companies can perform operations without having a workplace liability insurance policy in place. This means you must have a Workers’ Compensation plan every step of the way.
Businesses subject to California’s Workers’ Compensation requirements need insurance at all times. Suppose you are on a tight deadline and need to find coverage quickly. In that case, our California Workers’ Compensation insurance brokers can provide the guidance you need to get an affordable policy as soon as possible.
You can never be without a Workers’ Compensation policy unless you want to risk the possible penalties that come with being non-compliant with insurance laws. Even if your carrier drops your policy seemingly out of the blue, you must find a new one before your previous policy is officially canceled. If you do not, the Division of Labor Standards Enforcement in California might severely penalize you and your business. Once you find a new policy, send the necessary information to the Division of Labor Standards Enforcement so that you are not wrongly penalized.
How Does Carrying Workers’ Comp Insurance Protect Businesses in California?
Carrying Workers’ Compensation can protect your business from liability in the event that an employee is injured on the job. This is vital protection for companies who might otherwise be responsible for covering expensive damages due to a workplace accident.
Workers’ Compensation acts as a safety net for employers and employees alike. When employers have the proper Workers’ Compensation, and an employee is hurt at work, the injured employee can file a claim for benefits with their employer’s carrier. This eliminates the need for possible litigation from employees seeking compensation for lost wages and other damages due to a workplace accident.
The result is protection from financial liability for an injured worker’s damages. Instead of paying those costs out of pocket, your business will pay a premium to its insurance carrier. This can save employers considerable money and stress when dealing with the aftermath of workplace accidents. Insurance can also provide employers with resources to more easily investigate on-the-job incidents to catch possible fraudulent claims.
What Happens if Businesses Do Not Carry Workers’ Comp Insurance in California?
Several things might happen when businesses do not carry Workers’ Compensation in California. In addition to being liable for an injured worker’s damages, a business could face penalties from the Division of Labor Standards Enforcement.
The Division of Labor Standards Enforcement levies hefty fines against employers that do not carry the proper Workers’ Compensation in California. Fines might add up to twice the amount a business should have paid in Workers’ Compensation premiums for the period it was uncovered or $1,500 per worker employed during the time the business was uncovered. If an employer continues to go without Workers’ Compensation after being initially penalized, they might be further penalized with a fine of up to $100,000, depending on the specific circumstances. Employers might also face jail time for failing to carry Workers’ Compensation when required to in California.
When businesses are reported to the Division of Labor Standards Enforcement for not carrying Workers’ Compensation, they may be prevented from engaging in any operations until they find a policy. This could result in serious financial implications for businesses. If you need Workers’ Compensation fast because you are facing possible penalties for non-compliance in California, our brokers can help. The longer businesses wait to start carrying Workers’ Compensation insurance in such instances, the more serious the consequences might be.
Call NPN Brokers to Get Workers’ Comp in California
Contact NPN Brokers by calling (866) 340-9120 and speak with our California Workers’ Compensation insurance brokers today.
"*" indicates required fields
- Falsifying Payroll Information to Your Workers’ Comp Insurance Provider
- Can Members of an LLC Be Excluded from Workers’ Comp in Georgia?
- How to Get Workers’ Comp Proof of Coverage in New Jersey
- How to Get Workers’ Comp Proof of Coverage in California
- What is an Experience Modification Factor in Workers’ Compensation Insurance?