In California, even if you have only one employee, you need to have worker’s compensation insurance. Workers’ injuries can be costly –- and the state wants to be sure there is a way to pay for these potential injuries. The only people who may not have to pay worker’s compensation insurance are companies with sole owners (sole proprietors) and NO employees.

  • The premiums for worker’s compensation insurance are considered a cost of doing business and may not be passed onto employees. You will need to factor the cost of this insurance in as you determine the prices of your products and services.
  • You may purchase worker’s compensation insurance from many private insurance companies. Local Chambers of Commerce and trade groups may have group plans available to you. Larger companies or companies within the same industry may self insure if they meet state guidelines.
  • If these private sources will not offer you insurance, then you may purchase worker’s compensation insurance from the State Compensation Insurance Fund, also referred to as the State Fund.
  • The rates you pay vary by insurer and your industry. The Worker’s Compensation Insurance Rating Bureau suggests rates based on the statistics they keep, but they do not regulate rates.

You need to post information about your business’s worker compensation insurance and how to make a claim. If an employee need to make a claim, they can get the forms from your insurance company or from the California Division of Worker’s Compensation. The Department of Worker’s Compensation is responsible for administering the program and addressing any problems that arise.