Workers’ Comp Insurance FAQs for California Employers

What Businesses Need Workers’ Comp in California?

Every business that retains full or part-time employees needs workers’ compensation insurance in California. However, there may be some exceptions.

Partnerships, sole proprietorships, and self-employed people who are the sole individuals working at their business may not require workers’ compensation insurance, but this depends on their industry and the nature of their work. Even if it is not required, you may wish to buy insurance for your partnership or sole proprietorship.

Additionally, businesses that only work with independent contractors are not liable and may not need to purchase coverage for those contractors unless their work is particularly hazardous.

However, you should be aware of California’s employee classifications. When deciding whether an individual is an independent contractor, California courts will look at several factors, such as:

• The amount of control your business has over that person’s work
• Whether the individual is working on-premises and under supervision
• Whether the individual is aware they are classified as an independent contractor and not a regular employee
• How the individual’s work hours are enforced
• How the individual is given payment and whether taxes are being withheld

There have been multiple cases in which employers have had to pay hefty penalties because they illegally classified their employees as independent contractors. Even if you only have a single, part-time employee, you need to acquire workers’ compensation insurance if they are not an independent contractor.

How Do You Buy California Workers’ Compensation Insurance?

Luckily, there are plenty of cheap workers’ compensation insurance programs available from insurers like Strong Tie Insurance. Even if you have a business owner’s policy, you’ll typically need to purchase a workers’ comp policy as well.

To purchase workers’ comp insurance, simply find a provider and reach out for a quote. Some insurance providers offer cheap workers’ compensation insurance options that small businesses can easily afford.

What Must Workers’ Comp Insurance Cover?

Although there may be multiple insurance options available on the market from multiple providers, all workers’ comp insurance programs should cover:

• Medical costs to treat immediate employee injuries and illnesses
• Lost wages
• Ongoing care
• Death benefits and funeral costs
• Legal costs

Does Workers’ Comp Cover Independent Contractors and Self-Employed Workers?

Independent contractors and self-employed workers are not covered by workers’ comp policies, nor are employers required to purchase workers’ comp insurance to cover these individuals.

What’s the Difference Between Workers Comp and Other Insurance Policies?

Although workers’ comp insurance may sound similar to other business insurance policies, it differs on multiple levels. For one, it is a legal requirement. It is a criminal offense in California to operate a business without workers’ compensation insurance if your business has employees.

Furthermore, your employees do not pay into this insurance policy. You are solely responsible.

It also differs in terms of coverage when compared to employer’s liability insurance and general liability insurance.

Employer’s Liability Insurance

If an employee files a negligence lawsuit related to a work-related illness or injury, this type of insurance policy will cover your legal expenses. Unlike workers’ compensation insurance, payments are made for:

• Your attorney fees
• Your court costs
• Any settlements

Employer’s liability insurance is designed to help your business survive a lawsuit. An employee has the option to file a negligence lawsuit even if you have workers’ compensation insurance that covers their medical costs and other expenses.

General Liability Insurance

General liability insurance, also known as business liability insurance or commercial general liability insurance, is a broad type of insurance policy that covers general business risks. For example, it can help protect your business and your employees from liability for the following:

• Bodily injury
• Property damage
• Reputational damage (such as libel and slander)
• Advertising errors (such as false advertising or copyright infringement)
• Medical payments (if a customer sustains an injury at your business)
• Damage to rental properties

Satisfy All Your California Workers’ Compensation Needs

If you need to satisfy the law and protect your employees, it’s relatively easy to obtain California workers’ compensation insurance.

Contact Strong Tie Insurance today to get a quote for our cheap workers’ compensation insurance. We’ll also respond to any of your questions or concerns promptly.