A Rundown of Workers’ Compensation Insurance

Most states require companies to have workers’ compensation insurance. California is no exception. It protects employers from litigation and helps provide financial protection for employees who have to stop work due to illness or injury.

California’s Department of Industrial Relations has useful advice for employers on their obligations. Some of these include:

• A sole trader with no employees may still required to carry workers’ compensation insurance;

• A husband and wife partnership with no employees may find that coverage is optional. However, insurance would need to be in place if even a single temporary employee were hired;

• Even if you the employer are based outside California you may still need this insurance if employees are regularly employed in the State. It can also apply if a work contract is signed in California;
• Paying for workers’ compensation insurance is an employer’s responsibility. Employees should not be asked to contribute to the cost of the policy.

As people’s business situations can be quite unique, it is worth taking a specialist's advice on what can be a complex subject. Why not consult your insurance agent or broker about your options? Clarifying your obligations in relation to workers’ compensation insurance in California may help you start 2012 on a sound footing.

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