California Workers Compensation Insurance

Just because it’s required by law doesn’t mean you have to pay too much

If your business has even just one employee, in the State of California you’re required by law to carry worker’s compensation insurance. Not having it is a criminal offense with a fine of at least $10,000 and/or up to a year in jail.

Why so serious? Because taking care of your employees is your responsibility as a business owner. At the same time, you have a responsibility to your business and workers’ compensation helps you with that, too.

California Workers’ Compensation Insurance Coverage

In California, workers’ comp insurance is fairly simple.

• If an employee becomes injured or ill while on the job, their medical costs are covered by your insurance.
• If an employee dies while on the job, their family receives death benefits.
• While an injured or ill employee is out of work, they’re entitled to a portion of their wages – two-thirds of their pre-tax gross wages, up to the maximum allowed by law.

You, as the business owner, are also protected. Most lawsuits that could happen can be avoided, as long as you offer workers’ compensation insurance. If someone does sue, and people always sue, your insurance covers you as well.

California Workers’ Compensation Rates

The biggest complaint from many business owners is the cost of workers’ compensation insurance. It’s not a cost that can be passed on to your employees so finding ways to reduce the expense can be critical.

California workers’ compensation insurance rates are determined, in part, by a few factors:

• Your industry classification – some industries tend to have more accidents than others
• Your company’s history of work-related accidents otherwise known as your experience modification or experience mods
• Your total payroll

To make sure you’re paying the correct amount for workers’ comp – not too much or too little – it’s important that all of your employees be classified correctly. But the biggest factor in whether your premiums go up or down is the amount of accidents you report. All accidents should be reported because you never know when someone will sue, but reducing your overall claims can have a big impact on your premiums.

Ways to reduce your workers’ compensation insurance costs over time include:

• Enhanced safety procedures and training for all employees
• Written safety manuals that employees have easy access to and training on
• Safety committees made up of employees and management to help spot safety problems and correct them
• Get your employees back to work sooner with new or different positions or alternative work that allow them to complete their duties

The best way to keep your California workers’ compensation insurance costs down is to make safety a big focus of your business, even if it’s just you and a few other people.

Let IBW help you find more affordable workers’ compensation policy. If your business is brand new or about to hire its first employee, we can help you select a workers compensation policy that starts you on the correct path.