California Workers’ Compensation Insurance: Top Providers & Rules

California law requires every business with one or more employees to carry workers’ compensation insurance. California workers’ compensation insurance covers employee expenses due to work-related illness or injury and pays their lost wages. Employees who need workers’ comp can expect to pay between $0.40 and $19.68 per $100 of payroll expense.

If you need workers’ compensation insurance, save time and ultimately money when you get quotes and coverage from one top-rated provider. The Hartford was rated as our top workers’ compensation provider. Get small business insurance quotes within minutes through their online portal.

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California Workers’ Compensation Insurance Providers

Small business insurance companies vary widely in their prices and coverage for workers’ compensation insurance. This means one will have better rates or policy inclusions based on your particular business needs. If you are a California small business, here are the top workers’ compensation providers to consider a quote.

Top California Workers’ Compensation Insurance Companies

The Hartford

The Hartford is the fourth-largest provider of workers’ compensation insurance policies based on premium in California. The company offers six added coverages in its standard broad form workers’ compensation insurance policy, giving it an edge over competitors that charge for them, including extended reporting deadlines, voluntary compensation, and stop gap coverage.

Getting all business insurance needs through one major national carrier is convenient and offers pricing and customer service benefits. This makes The Hartford ideal for business owners who should have more than the most basic coverage other providers offer.

California State Compensation Insurance Fund

The California State Compensation Insurance Fund is the largest provider of workers’ compensation insurance in the state and among the top 10 in the country. The State Compensation Insurance Fund guarantees workers’ compensation insurance for companies seeking breaks on high-premiums or unable to obtain coverage from a private insurer.

California is a large, densely-populated state with the world’s fifth largest economy. The entertainment industry, technology sector, and agricultural operations create a unique set of needs. The state fund is ideal for businesses like these that need to get workers’ compensation insurance quickly to cover casual or seasonal laborers.

The Zenith

The Zenith is a Canadian-owned insurer and one of the largest commercial insurance companies in the nation. This national carrier covers a wide variety of business insurance needs and focuses on workers’ compensation.

The Zenith has a special program for agribusiness, which makes it highly attractive to the ranch and farm communities along the California coast. The Zenith understands that the needs of business owners change, and policies need to be adjusted during seasonal cycles. Business owners who choose Zenith can work with local professionals to purchase and maintain their workers’ compensation insurance policy.

Travelers Group

Travelers Group is the largest provider of workers’ compensation insurance in the nation and one of the top five in California. Travelers Group strives to be a partner with companies to get employees back to work quickly. Using Travelers’ unique ConciergeCLAIM, a care provider is assigned to shepherd the worker through the claims-filing process, arrange proper care, and help them get back to work.

Small business owners who work with Travelers Group have the advantage of a local partner who will help them adjust as their business grows. While the company is one of the largest providers of insurance in the nation, it’s known for providing clients with strong customer service and personal assistance.

Employers Holdings

Employers Holdings is a top provider of workers’ compensation insurance in California. This national carrier specializes in workers’ compensation, and focuses on understanding the unique needs of various class codes. Employers covers a wide range of businesses but can be particularly beneficial for businesses in low- to medium-risk industries.

Employers Holdings has agreements with several fast food franchise parent companies, creating affordable class pricing by increasing the risk pool. This carrier partners with various state restaurant associations and is endorsed by the California Restaurant Association. Their depth of experience helps them offer attractive prices on workers’ comp for franchises, making them ideal for franchisers and their parent companies.

What Workers’ Compensation Insurance Is

Workers’ compensation insurance pays the costs of medical care, rehabilitation services, and partial weekly wages to employees whose injuries or illnesses are the result of their job duties. Each state’s workers’ compensation requirements vary greatly, but many cover prescription drugs, retraining costs, and death benefits are also covered in many circumstances. State laws also determine which employers must carry workers’ comp and whether an employee has the right to sue his or her employer. In general, employees can only sue in certain situations, such as gross negligence or intentional harm.

What California Workers’ Compensation Insurance Covers

California workers’ compensation insurance has minimum statutory limits defined per occurrence per employee, and per the aggregate policy limit. Minimum policy limits in California are $100,000 per occurrence, $100,000 per employee, and $500,000 for the policy limit. This means that if three restaurant workers were injured in a kitchen fire in San Pedro with $200,000 in costs between them, a policy with minimum protections would only cover up to $100,000 for the accident. The employer is on the hook for the rest.

California workers’ compensation insurers automatically issue $10,000 within 24 hours of a claim to cover emergency medical attention for employees. Upon claim approval, workers’ compensation insurance covers the health care costs associated with injuries and weekly income benefits to employees. Denied claims are submitted to the worker’s insurance company or submitted to the fraud investigation unit.

Some major items that workers’ compensation insurance covers include:

• Medical Expenses: Pays emergency and health care expenses, including prescription medications associated with injuries or illnesses at work.
• Rehabilitation Expenses: Covers costs of physical therapy and rehabilitation to help the injured employee recuperate.
• Retraining Benefits: Handles the cost for employees to attend retraining programs for new jobs if they’re unable to return to their previous position.
• Disability Payments: Covers both short-term and permanent disability benefits so the injured employees get a weekly income.
• Beneficiary Expenses: Pays funeral and burial expenses of an employee who dies as the result of work-related illness or injury.
• Employer Liability: Protects employers from fraudulent claims and pays for the defense of civil suits stemming from workers’ compensation claim conflicts.

What California Workers’ Compensation Insurance Doesn’t Cover

California workers’ compensation generally covers most work-related illnesses or injuries. However, claims may be denied if an employee was injured while off-duty, volunteering, or in connection with illegal activity. For example, if a small business has a bowling team and an employee injures their thumb while bowling, their injury probably would not be covered by workers’ compensation.

California Workers’ Compensation Insurance Costs

Workers’ compensation insurance premiums are based on the amount of payroll paid and work classifications. When a workers’ comp policy starts, premiums are estimated by multiplying job class codes by forecasted payroll cost (divided by 100). An audit is done at the end of the policy period to make sure the right amount of premium was paid.

The formula for determining workers’ compensation insurance rates is:

Premium = Classification Code Rate x Experience Modification Rating x Payroll per $100

Consider a small solar installation company in Anaheim that has 10 employees (not including the company owner who is exempt from workers’ compensation coverage requirements). The breakdown of employees is one office clerk (class code: 8810) who makes $35,000 per year, one outside sales representative (class code: 8742) making $50,000 annually, and a crew of installers (class code: 3724) with total payroll of $300,000.

The workers’ compensation insurance premium for this business would include:

Clerk: $0.40 x $350 = $140
Sales Rep: $0.49 x $500 = $245
Installation Crew: $7.47 x $3,000 = $22,410

The workers’ compensation insurance carrier will then apply any relevant discounts or experience modifications based on the employer’s loss history and the insurer’s specific underwriting guidelines. Actual rates will vary among insurance carriers contingent on the type of business risk they are most comfortable underwriting.

California Workers’ Compensation Rate Examples

Individual employee workers’ compensation insurance rates vary based on the employer’s business experience and claims history. Rates are also contingent on the amount of coverage selected. A baseline policy starts with $100,000 of coverage per employee. To double or triple coverage, expect to pay 2% to 3% more in total premium.

California is a competitive state when it comes to workers’ compensation insurance, so employers have the option of shopping around to get the best coverage for the best price. If you don’t have the time to shop for policies, you can also use a workers’ compensation insurance broker to compare quotes from multiple carriers.

Insurance321 uses a simple online application form that takes less than a minute to complete. Once you apply, their system automatically reviews carriers, and a representative connects you to the best one for your business. The process with Insurance321 is fast, easy, and lets you get back to running your business.

California Workers’ Compensation Audit Requirements

Workers’ compensation premium audits are conducted by providers to make sure an employer pays the right amount of premium. These audits aren’t required by law, but are required by providers in order to renew a policy. Depending on the results of an audit, an employer may get a refund for excess premiums paid or they may get an invoice to cover any shortfalls.

The workers’ compensation insurance premium is calculated using a company’s payroll and employee work classification codes. Additionally, experience modifiers rate employers’ risk based on past losses or favorable loss history records. Audits are performed by carriers prior to renewal to reconcile previous premium estimates and set renewal rates.

To complete a premium audit, insurers review an employer’s payroll records for the previous year, starting approximately two months prior to renewal. A small business owner can save a lot of extra work and headache by choosing a carrier and payroll processor that integrate together. With integration, the insurance carrier is able to charge based on current payroll values.

California Workers’ Compensation Insurance Laws

According to California Labor Code, California Labor Code Section 3700.5, it is a criminal offense to not have workers’ compensation from the minute an employee starts. Failing to follow California workers’ compensation laws can lead to penalties of twice the amount the business would have paid in workers’ compensation premium or $1,500 per employee, whichever is higher.

Some potential consequences of failing to follow California workers’ comp laws include:

• Fines not less than $10,000 up to $100,000
• Personal liability of officers and directors for any workers’ comp claims from employees
• Misdemeanor with penalty up to one year in jail

The penalties for violating California workers’ compensation insurance laws are some of the worst in the nation. This makes it all the more important for California employers to understand and follow workers’ comp requirements.

California Workers’ Compensation Insurance Exemptions

Employers in California who have even one employee are required to maintain workers’ compensation insurance. However, there are some exemptions to this rule. Directors, officers, and majority owners of companies are often exempt from workers’ compensation requirements in California.

Company owners and officers who don’t want to maintain workers’ compensation coverage are required to complete forms with their insurance carrier that state their ownership and involvement in the company. There is also an option for self-insurance in California. This option is limited to companies with a minimum of $5 million in net worth and a minimum of $500,000 in annual net income. Companies who want to self-insure must post a security deposit and get approval from the Division of Workers’ Compensation.

California State Fund: State Compensation Insurance Fund

California’s State Compensation Insurance Fund is a state-sponsored workers’ compensation fund that guarantees coverage for new companies and high-risk businesses, but it is not a branch of the State of California. The State Compensation Insurance Fund competes with private insurers, and offers competitive pricing and discounts for employers who qualify.

The California State Compensation Insurance Fund offers four plans, including:

• Standard Plans: Uses base rates as defined by the classification code charts.
• Premium Discounts: Provides discounts for companies meeting a high-premium threshold.
• Schedule Rating: Considers employers’ individual risk characteristics aside from standard rating practices. Offers discounts for return-to-work programs and safety standards.
• Special Plan: Includes benefits for employers with some collective bargaining agreements in place.

The State Compensation Insurance Fund remains one of the largest workers’ compensation insurance providers in the nation, with over $900 million dollars in premiums collected and over $21 billion in total assets.

California Workers’ Compensation Regulations

To ensure that employees know their rights and can report an injury or file a claim, California law requires that notices be posted at an employer’s office or at job sites. The Notice to Employees poster must be in a conspicuous place where employees typically convene. This is often a break room or entrance to a restroom, but doesn’t need to be as long as employees are able to review it.

Employment posters are available for free through the California Department of Labor, or through most workers’ compensation insurance carriers or payroll services. Employers who fail to properly post this notice are guilty of a misdemeanor and may be subject to civil penalties of up to $7,000 per violation.

Finally, California workers’ compensation insurance law makes it illegal to discriminate against employees who file a workers’ compensation claim. Employers are subject to penalties and civil action for improperly terminating employees who file claims.

California Workers’ Compensation Insurance Deadlines

Employers who are subject to California workers’ compensation insurance requirements must follow strict deadlines in order to remain in compliance. Deadlines exist to protect the employee from delayed care and the employer from fraudulent claims.

Several key deadlines for California workers’ compensation insurance include:

• Employee’s Report of Injury: Employer must be notified immediately and also provided with written notice of work-related injuries or incidents within 30 days.
• Employer’s Response: Employer has one day upon notification to provide a claim form (DWC 1) to the employee and to authorize medical treatment up to $10,000 while the claim is pending.
• Deadline to Reject: Employer and insurance carrier have 90 days to reject or deny the claim in writing; otherwise, the claim is presumed to be covered.
• Statute of Limitations: Employee can provide written notice of incident and has one year to file a claim.

How to File a California Workers’ Compensation Claim

In order to receive workers’ compensation benefits in California, it’s important for employees and employers to follow the correct process for filing a claim. Failure to follow these steps can lead to an employee sacrificing coverage for a work-related illness or injury. Employers who fail to follow these steps can be held liable for workplace injuries or even face penalties and potential prosecution.

The steps for filing a workers’ compensation claim in California include:

1. Employee seeks medical attention and notifies employer of incident immediately.
2. Employer approves initial $10,000 in benefits while the claim is pending approval.
3. Employer files the claim and awaits a work restriction report from the employee’s physician.
4. Employer and insurance carrier have 90 days to approve or deny the claim.
5. Employer refrains from unduly firing an employee who has filed a workers’ compensation claim.
6. Employer offers regular, modified, or alternative work once the employee is approved by doctor to return to work.
7. Employee has 30 days to accept the employer’s offer or the employer may withdraw the offer.

Employers must offer the employee the job he held prior to injury after his recovery. If he is unable to return to that job role due to long-term disabilities from his job, but can still work, he must be re-assigned. Timelines are subject to change with new laws and regulations.

Tips on Getting California Workers’ Compensation Insurance

Some tips on getting California workers’ compensation insurance are:

Train Employees on Safety Protocol

Workers’ compensation premiums are based largely on a company’s claim history and risk exposure. Many carriers, including the state fund, provide discounts for companies with a proactive approach to employee safety. To help save on workers’ compensation insurance costs, be sure to create a safety plan, distribute it in writing, train employees, and place safety warnings where appropriate.

Classify All Employees Properly

Employees subject to workers’ compensation insurance requirements are classified based on their regular job duties. By properly classifying employees, employers often save money on premiums and ensure employees are properly covered. Failure to properly classify an employee performing high-risk duties can lead to claims being denied and/or penalties for employers.

Have Your Previous Loss History Report

When shopping for workers’ compensation insurance policy at renewal, obtain a loss history report from your existing carrier. This will provide a carrier with your claim history, help them to define your experience modification factor, and determine any appropriate discounts or increased rates. Without it, you aren’t comparing apples to apples.

California Workers’ Compensation Frequently Asked Questions (FAQ)

There are many questions that arise surrounding workers’ compensation insurance. If you still have questions after reading this article, here are some of the most frequently asked questions about California workers’ comp.

1. How much does workers’ comp pay in California?

Employees in California are eligible to receive up to two-thirds of their average weekly wage based on their previous 12 months of employment. The minimum payment is $182.29 per week with the maximum being $1,215.27, according to the California Department of Industrial Relations office.

2. How is the average weekly wage calculated?

Workers’ compensation claim payments for lost wages are based on the Average Weekly Wage (AWW). This is usually calculated using the monthly wage times 12 divided by 52 weeks in the year. Multiply it by two-thirds (66.66%) to determine the workers’ compensation weekly rate.

3. Can you get workers’ comp for mental anguish?

Psychiatric conditions are covered by workers’ compensation insurance if the breakdown happened as a result of an event at work. Examples of potential claims for mental anguish include extreme exhaustion, receiving threats, or harassment at work. Claims can be made, but it may be more difficult to get claim approval for them and require a battery of psychological tests.

Bottom Line

Workers’ compensation insurance covers employees who get sick or injured as a result of their work. Although minimum workers’ compensation insurance coverage is required in California, employers are often well served by including additional coverage to help employees recover and get back to work faster.

If you are looking for a small business insurance company to help meet your workers’ compensation insurance needs, be sure to visit The Hartford. You can get a quote in minutes for all your insurance needs and can rest easy knowing that you and your employees are covered for any work-related incidents that might arise.

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