Do You Need Workers’ Compensation Insurance?
One of your people picks up a heavy box — and throws his or her back out. Or perhaps an employee suffers a repetitive strain injury from repeatedly making the same arm motion at a workstation. Or maybe a team member suffers from eyestrain and headaches due to long hours at the computer.
In all of these instances, you, the employer, are required under California Labor Code Section 3700 to provide workers’ compensation benefits to those workers. But what does that entail — and how does workers’ compensation insurance fit into the picture?
What Are Workers’ Compensation Benefits?
In the Golden State, organizations that employ one or more employees must provide workers’ comp benefits. According to the State of California Department of Industrial Relations, these benefits are:
- Medical care for an illness or injury caused by work
- Temporary disability benefits to cover lost wages due to a work-related injury or illness
- Permanent disability benefits in the event a worker doesn’t make a full recovery
- Supplemental job displacement benefits to fund skill enhancement or retraining in the event a worker doesn’t make a full recovery and doesn’t return to work for you
- Death benefits that are paid to an employee’s dependents in the event he or she dies due to a job-related illness or injury
Workers’ Compensation Insurance
Workers’ compensation benefits are intended to protect employees who are injured or become ill as a result of their jobs. It’s also intended to protect employers, since it minimizes the chances of workers bringing civil suits against them. However, workers’ comp benefits can run into the tens, if not hundreds, of thousands of dollars per case, which can be a significant financial burden for a business. For this reason, the State of California requires you to purchase workers’ compensation insurance. If you don’t, you’ll be in violation of the Labor Code, and your business can be shut down until you have purchased adequate overage — plus, you can incur hefty fines.
So what exactly is workers’ compensation insurance? It’s a form of coverage that, for a monthly premium, protects you against the types of claims mentioned above. Of course, since workers’ comp fraud is not an uncommon occurrence, your business insurance company will investigate each claim thoroughly to make sure that it’s legit before paying out.
Note that if you’re a sole proprietor or independent contractor, it might be possible to purchase workers’ compensation insurance in Los Angeles for yourself. Still, since this entails that you assume full liability for all injuries and illnesses, it’s advisable to discuss the implications with a legal advisor first.
How to Purchase Workers’ Compensation Insurance in Los Angeles
According to the California Department of Insurance, employers have three options when purchasing workers’ compensation. They can purchase insurance from a licensed private insurance company. This usually occurs with the assistance of a qualified broker that can advise them on the best options for their specific business. In addition, employers can purchase a policy through the State Compensation Insurance Fund — also referred to as State Fund. This is a non-profit organization, operated by the state, that provides insurance and is in competition with private insurers. If you can’t obtain insurance any other way, the State Fund will likely be able to help. Finally, employers can also self-insure, so long as they have a certificate from the Office of Self-Insurance Plans and post security deposits.
Grand Mutual Insurance
To learn more about obtaining workers’ compensation insurance in Los Angeles and to find out how we can help you obtain the right coverage, contact us today.