Workers’ compensation insurance is a policy generally purchased by business owners that allows them to pay wages and provide hospital benefits to workers who have become disabled after suffering an on-the-job accident. Employers are lawfully required to purchase this type of service in most regions of the United States.
In California, it is highly valued due to the large number of workers who provide services to different companies. For the same reason and by legal obligation, small industries and large corporations have assumed the responsibility of obtaining workers comp insurance to cover any unexpected event that may jeopardize their financial stability and that of their employees. But, how much is workers comp insurance in California?
How much does workers comp insurance cost me in the state of California?
An employer in California can pay as much as $1.61 per 100 workers. The worker’s comp insurance quote is based on several elements: location, payroll, industry, risk factors, coverage limits, and claims history.
If you are running a business and need workers’ compensation insurance, you can purchase it as follows:
- Buy it through a private company: The first thing you should do is submit a registration application through the website of the insurance company you choose. Before choosing, be sure to evaluate quotes from different companies.
- Buy it through the state fund: California has a competitive state fund to compensate employees.
- Self-insure your business: Workers can benefit from the Office of Self-Insurance Plans (OSIP). To do so, it is necessary to meet a series of requirements, one of which is to have been in business for at least three years.
How does workers’ compensation work?
One thing is quite certain: Both workers and employees are protected by workers’ compensation agreements. In California, these types of contracts have become extremely valuable because of their benefits. Laws have been created to facilitate the workers’ compensation process. The intent is that a worker who has been disabled by accident will receive the compensation they need to get by until they are healed.
The employer also benefits from this type of insurance since offering the injured worker the possibility of obtaining income will avoid tedious and costly litigation that could compromise his financial health.
This type of policy includes:
- Employer’s liability insurance: It is intended to help the employer defray the cost of any legal proceedings if the injured worker opens legal proceedings against him by considering that the accident for which he has been disabled is his responsibility.
- Exclusive Remedy: This clause in the compensation insurance restricts the worker from bringing any lawsuit against the company. It is possible as long as the worker accepts workers’ compensation benefits.
In California, the workers’ compensation policy covers:
- Temporary disability benefits.
- Specialized medical care.
- Supplemental benefits in case of job displacement.
- Coverage for the death of the employee.
- Permanent disability benefits.
- Return to work supplement.
It is also important to know that there is an agency capable of regulating compensation coverage for employees of public and private companies. This is the California Department of Industrial Relations, which offers the necessary tools to carry out the corresponding claims and to know the laws in this regard.
Penalties for Not Having Workers’ Compensation Insurance
Did you know that you are required to carry workers’ compensation insurance if you own a business in California? The law is clear about this and requires employers to purchase this policy. If you do not do so, then you will be incurring a serious offense that will be sanctioned as follows:
- Almost always, the competent bodies order the suspension of the company. In this case, the penalty will be $10,000. But that’s not all because, depending on the offense, the owner could be sentenced to up to one year in prison.
- If the Division of Labor Standards Enforcement imposes the sanction, the employer will be obliged to pay double the amount of money it would have to pay for premiums during that lapse without having insured its workers. The amount could be $1,500 for each uninsured worker.
- In cases where the worker has been injured, the employer will be fined $10,000 per employee if it is considered compensable. If the injury case is treated as “non-compensable,” the fine will be $2,000.
Compensation insurance is a useful tool in most U.S. states. But in California, it is regulated by law to protect both the worker and the employer.
Currently, many companies are providing this service. But if you are going to take an insurance, make sure you do it with the best or the one you are most satisfied with. It is advisable to compare services before choosing one in particular.