Workers Compensation Insurance in California
What is workers compensation insurance?
Almost every work environment poses at least some risk of accidents that could cause injuries. Should California employees be injured while at work, workers compensation insurance may provide coverage.
Workers compensation insurance generally provides specific protection for workplace injuries and illnesses. Policies can benefit both employer and employee if someone is injured on the job.
Which California businesses need to carry workers comp insurance?
In the state of California, most employers are required to carry workers comp insurance so that their employees are covered. Not having coverage when it’s required can result in legal consequences.
Under the California Labor Code, not having workers comp when it’s required can be a misdemeanor offense. Serious offenses could result in a fine of up to $10,,000, and up to a year in a county jail.
Not having workers comp for employees also leaves businesses exposed to major liability risks, as they could be solely liable if an employee is injured.
What employee injuries and illnesses fall under workers comp insurance?
Workers comp insurance normally provides broad coverage for injuries and illnesses that employees might suffer as a result of their jobs. Coverage frequently applies to:
- Sudden Injuries (e.g. machinery injuries)
- Sudden Illnesses (e.g. unintentional poisonings)
- Long-Term Injuries (e..g. repetitive motion injuries)
- Long-Term Illnesses: (e.g. mold exposure)
- Death (due to workplace injury or illness)
If there’s a covered claim, workers comp will typically pay medical costs and partial lost wages.
Can employees sue after filing a workers compensation claim?
Most workers compensation policies require employees to waive their right to sue when filing a claim. This is often in the best interest of both employee and employer, as it’s more efficient, incurs fewer legal expenses, and provides a faster payout than a lawsuit likely would.
Employees technically may have the option to sue instead of filing a claim. In most cases, though, they give up that option when they make a claim against the employer’s workers comp policy.
How do workers compensation classification codes work?
The insurance industry uses standardized codes to identify different types of employees that could be covered under workers comp. These codes are set by the National Council on Compensation Insurance (NCCI), and serve to catalog employees based on their job roles.
There are numerous codes that the NCCI has set. A few examples that illustrate how the codes work are as follows:
- 0005: Nursery farms
- 7038: Small watercraft sightseeing tours
- 8803: Financial auditors and accountants
- 8810: Clerical office employees
- 8829: Nursing home and convalescent home facilities
Sometimes codes can be particularly specific, For instance, 2143 denotes apple cider makers and wineries, but 0079 is for vineyards. Another example is code 5190, which is specific to holiday decorators.
An insurance agent specializing in workers comp insurance will make sure a business’s employees are classified with the correct code.
Does workers comp insurance extend to subcontractors and freelancers?
Anyone working as an independent contractor usually isn’t covered by a business’s workers compensation insurance. Insurance is typically restricted to employees of the business.
In select cases, businesses might have to acquire workers comp that does extend to independent contractors. This is an exception to the norm, however.
If businesses hire independent contractors and have questions about workers comp, a knowledgeable insurance agent can review their situation and whether it calls for the insurance.
How are workers compensation premiums determined?
The premiums for workers compensation are based on multiple factors. Job classification codes, employee pay, the number of employees, and past claims are just some of the details that impact cost.
An independent insurance agent can get custom quotes from several insurers, to make sure businesses find the coverage they need at a competitive rate.
Where can California businesses find workers compensation insurance?
If you need help finding workers compensation insurance for a California business, get in touch with the independent insurance agents at Nichols Insurance Agency. We’ll help you find the workers comp coverage that your business needs to carry.
