The Basics Of Workers Compensation Insurance In California

It is a policy issued to a business owner that provides insurance coverage for the costs of work-related injuries to their employees. This type of insurance pays for all costs associated with workers’ injuries, such as medical bills, lost wages, rehabilitation, and permanent disability or death.

Benefits under workers compensation insurance in California are set by the state workers’ compensation regulatory commission. You can visit to get workers compensation insurance in California.

What Wages Are Subject to Workers' Comp? - Hourly, Inc.

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This is pretty simple. The premium is a percentage of your estimated payroll for the term of the policy. Since workers’ risk of injury varies based on the type of work they do, each business is assigned a specific classification that represents the degree of risk in their industry.

There are approximately 500 classifications published by the state to cover all industries and businesses in California. The premium rate for each classification is determined by the degree of injury risk in the industry it represents. That is, the premium rate of a convenience store is lower than that of a construction contractor and higher than that of a telemarketing company.


If you are operating a business in the state of California and employ any workers, the state labor commission requires you to have workers’ compensation insurance. The only businesses that are exempt from this rule are those operated solely by the owners with no employees.

In other words, if you have employees that include occasional or seasonal part-time help, you must obtain workers’ compensation coverage. If you operate without it, you risk heavy fines and possible closure of your business.

Any person who works for the company and is not the legal owner is considered an employee. Family members, including the owner’s children, who perform work for the company, are also considered employees, even if said family member or children are donating unpaid time.