Workers Compensation Insurance In California An Overview
Law requires businesses in California to purchase workers compensation insurance
, regardless of their size. Non-compliant enterprises can be penalized or even shut down by the state, so it is better for a business to negotiate with insurers and get adequate insurance.
Workers compensation insurance covers employees from injury or illness that occurs during the course of employment. The policy will pay for the medical expenses if an employee is hurt while performing a work related task. It will also compensate for the lost income in case the employee is unable to return to work for a period of time.
In California, workers' compensation is mandatory not just for high-risk jobs, but also low-risk occupations where any injury or illness is unlikely.
Insurance carriers determine the premium of individual businesses on the basis of a rating system. Each type of business is accorded rates. A bookkeeper is charged on rate, a contractor another and a distributor another. The system is developed after analyzing the claims history by companies functioning in that industry.
Insurers in California use the data of Workers' Compensation Insurance Rating Bureau of California (WCIRB). The WCIRB has more than 400 member companies. No state money is used to fund the bureaus operations which are funded primarily by membership fees and assessments.
California has one of the highest workers' compensation insurance rates in the US. For most small business, workers compensation is the second highest mandatory business operating cost next to payroll expenses.
When an employees death or injury is not consistent with their regular employment, they or their families are not entitled to compensation. The reasons include Drugs or alcohol; Self-inflicted wounds; Suicide; An altercation caused by the employee's aggressions; Any recreational or social activity that was voluntary or took place off duty; and A felony committed by the employee.
Employers are required to inform employees about their workers compensation coverage and how to obtain medical treatment for injuries.
Until recently, it wasnt unusual for small businesses in California to operate without Workers Compensation insurance as law enforcement agencies were ill equipped to detect the businesses that were not abiding to law. However, the state has now begun to enforce the law with commitment and any business without the workers compensation is penalized. Although businesses are given the opportunity for purchasing the coverage, any business that misses the time frame is fined up to $1,000 per employee.
The state has the authority to shut down a business with any employees that does not carry workers compensation insurance despite direction. An injured employee can also sue an uninsured employer, who would have to cover all expenses out of their own pocket. On the contrary, expenses of an insured employer will be paid by the policy.
As workers compensation rates are only going to soar, it is better to get the insurance now. For
workers compensation California businesses should meet the representatives of various insurers or, to make your task easier, the brokers. They will provide the most competitive quotes due to their relationship with many leading insurers. They also could provide many value added services in addition to the programs provided by the insurer.
by: Nicole CFO
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