Ca Workers Compensation Insurance: Does Your Business Need It?
Many new business owners assume that CA workers compensation insurance is only necessary
for companies operating in hazardous industries such as construction or automotive repair. But common workers compensation claims include injuries due to slips, trips, and falls, lifting heavy objects or being struck by an object, or an accident with machineryall things that can happen in just about any workplace. This is a common misconception that can put you out of business if you ignore CA workers comp insurance laws.California requires that you carry workers compensation insurance if you have at least one employee. It ensures that injured employees get the medical care they need and receive compensation for a portion of the income they lose while they are unable to work. As a business owner, CA workers compensation insurance also protects you from lawsuits by employees who may become injured as a result of the work they do for your company.
According to the California Department of Industrial Relations and the California Labor Code, failing to carry workers compensation insurance in CA is a misdemeanor punishable by a fine of up to $10,000 and/or imprisonment for up to one year. The state labor commissioner issues a stop order if it is determined that an employer is operating without workers compensation insurance, and prohibits the use of labor until the employer obtains coverage. The Division of Labor Standards Enforcement may also assess a penalty of $1,000 per employee on the payroll at the time the stop order is issued up to $100,000.
If you were previously wondering about whether to purchase CA workers comp insurance, these harsh consequences have likely made up your mind. The next step is to find an insurance agent with experience in CA workers compensation insurance and who has access to more than one insurance company. This access will ensure that you obtain the most appropriate insurance and the most affordable premiums.
You will primarily be relying on your agent to help determine the amount of insurance necessary for your company. He or she will properly classify your business into the CA workers compensation classification code that best matches the type of work being performed by your employees. Your workers compensation premium is calculated based on your payroll times the rate per 100 for the CA workers comp code in which your employees are assigned, so its imperative that you are as accurate as possible when projecting your payroll over the twelve-month period of the policy.
Stay tuned for part two of our three-part series on CA workers comp insurance. Part two will help you identify potential hazards, assess risks, and minimize injuries. Part three will provide you with tips to save money on your companys workers compensation insurance premiums. Learn more about your options by contacting the CA workers compensation insurance specialists at 562.498.8661 or by visiting www.KellyWilliamsIns.com.
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