The Golden State of California is home to some of the largest companies in the world, from Apple to Disney. However, it’s also home to a wide range of smaller businesses and business owners who need to protect their employees without breaking the bank. Workers compensation coverage is 1 of the most important coverages a business owner must carry if they have employees. Benzinga addresses common questions about workers compensation and shows you California’s best workers comp insurance.
Workers compensation is a type of business insurance that provides benefits to employees working for an employer for injuries sustained on the job. Benefits include medical coverage, disability income and death and survivor benefits.
There are 4 major types of workman’s comp benefits. They include:
Wage replacement benefits: An employee is entitled to a wage replacement benefit in the event of a workplace injury. The California workers’ comp policy offers a lost wage reimbursement for workers who must miss work due to a workplace injury or illness. This benefit pays an injured worker two-thirds of his or her lost gross wage. To qualify for this benefit, your employee must miss at least 3 days of work.
Permanent partial disability benefits: If you sustain a major injury at work, you might receive a permanent disability benefit if your doctor can prove that the injury will permanently affect your ability to work. Your doctor must also confirm that they believe that your injury or illness will persist for the foreseeable future. Your age, specific disability, occupation and severity of your injury will all play a role in the amount of money you’ll receive from your permanent disability benefit.
Vocational rehabilitation benefits: If you can’t return to your previous job after your injury or illness, vocational rehabilitation benefits can cover the costs of training to pursue a different career. This benefit can include everything from counseling to attending a job retraining program.
Medical benefits: In California, injured workers are entitled to a full medical benefit. Even if your claims are still pending, you are eligible for medical benefits up to $10,000. This benefit covers hospital bills, diagnostic services, doctor's visits, medical supplies, acupuncture sessions, occupational therapy sessions and prescription medicines. If your employer has set up a dedicated health care provider network, you may have to make use of doctors within the network except in the case of an emergency.
Small businesses with both part and full-time employees
securely through Hiscox's website
Best For:
Bundling commercial policies
securely through Progressive Workers Comp's website
The Best Workers Comp Insurance in California
What is the best workers compensation insurance in California? Several factors make a difference, including premiums, claims-paying record and the insurer’s experience in a particular sector.
Best Overall: Progressive Workers Compensation Insurance
Best For:
Bundling commercial policies
securely through Progressive Workers Comp's website
Progressive has a great range of commercial products (including workers' comp) as part of their Progressive Advantage® Business Program. Worker's comp is required by law in most states, and Progressive will help make sure you have adequate protection.
Progressive offers a variety of workers compensation insurance products. It is one of the largest providers in California and also has an A+ rating with AM Best. Progressive offers multiple policy options and covers just about every type of worker, from your typical office, such as clerical workers, to factory workers and more specialized ones like roofers or computer technicians.
Workers' comp coverage from Progressive will help you cover your employee's lost income or medical expenses should they experience an injury or illness related to their professional duties.
It offers policies for businesses that are new or those have been in business a while. You can get a quote online or through a Progressive independent agent in California. In 2020, Progressive reported that the average cost of their worker's compensation program as only $86 per month on average.
securely through Simply Business Insurance's website
Simply Business offers a comprehensive suite of business insurance that specializes in making it easy to insure your business.
Whether you’re looking for construction workers' insurance or insurance for your startup, Simply Business helps you find the right coverage at the right price.
Tell Simply Business a little bit about your business and you'll get almost-instantaneous affordable quotes from top insurance providers. You can look into workers’ comp insurance that will cover everyone on your team, and you can get covered in accordance with California law without overspending.
Building your business is hard enough. Let Simply Business make it easier. Get a quote from Simply Business today.
Best for Small Business: biBERK Workers Compensation Insurance
Staying compliant with state and federal regulations
securely through biBERK's website
If you have a small to mid-sized business, biBERK offers some of the best workers compensation insurance in California. It is a lower-cost option with competitive rates and an experienced claims-paying record.
biBERK from Berkshire Hathaway Direct Insurance Company offers a wide range of business insurance coverage, including professional liability, general liability, property and liability, commercial auto, umbrella insurance and workers comp insurance.
biBERK providers workers' compensation insurance that is compliant with both state and business laws. Enjoy peace of mind that your business is getting the type of coverage it needs. The best part? Your coverage will grow with you as your business does, too. Need some help? Their experienced workers' comp insurance experts are just a phone call away.
It offers a variety of policy options that can be found online or through a California-licensed independent agent. biBERK has 40 years of experience in the workers compensation industry and is part of Warren Buffett’s Berkshire Hathaway Insurance Group.
Get your free quote today and protect your small business with some of the best workers comp insurance in California for compliance.
Best for Contractors: CoverWallet Workers Compensation Insurance
CoverWallet is 1 of the best workers compensation insurance companies in California. It is a top-rated insurer that offers competitive rates to contractors and construction businesses who have high employee turnover, which traditionally leads to higher-than-average claim costs for many insurers.
CoverWallet is great for contractors and sole proprietors -- you can get coverage in California for yourself even if you don't have employees.
CoverWallet offers a variety of business insurance policies for companies of all types. Get a customized quote today to get the best worker's comp insurance in California.
On Tivly, you can find free commercial coverage quotes from a wide range of insurers. Just select your coverage type and enter important details about your business such as industry, number of employees and payroll dollars. Within just a few short minutes, you have multiple quotes. Quotes are also available over the phone.
Tivly works with trusted business providers like The Hartford, Progressive, Liberty Mutual and Gallagher. Aside from workers comp, get quotes for liability, bodily injury, malpractice and other types of coverage.
Visit Tivly to get a quote for the best workers comp insurance in California for your commercial enterprise.
securely through The Hartford Workers Comp's website
The Hartford is a force to be reckoned with when it comes to comprehensive workers’ compensation and fast coverage. The Hartford offers multiple payment options and pay-as-you-go billing solutions perfect for everyone from small business owners with limited cash flow to business owners who work in seasonal industries like construction.
It also offers employees access to over 1 million health care providers — so no matter where you live, your employees won’t need to travel too far to receive in-network medical care. The Hartford also provides discounts and bundle deals to lower your costs. If you need a quick insurance plan, this group is an excellent choice for almost everyone.
Best For
Industry-specific specialized protections
securely through Liberty Mutual SBI Tivly's website
Best for Large Employers: Liberty Mutual
Liberty Mutual is a well-rated insurer in California that offers competitive rates to large companies, both new and established businesses. It has an A+ rating with AM Best. Quotes are available through its broker network of independent agents.
One great thing about Liberty Mutual is their Injured Worker Toolkit. This is a self-service portal that allows your workers to file and mange their own workers' comp claim. Not only will this save you time and resources, it helps protect you from errors during the claims filing process.
California Workers Compensation Insurance: An Overview
Workers' compensation is a legally required insurance policy that protects employers from a lawsuit by workers who are injured while working. Workers’ comp is a type of no-fault insurance that covers medical costs, rehabilitation and wages for employees who are injured became ill while working. Some of the most common causes of workplace accidents include overexertion, slips and falls and transportation accidents.
Just because an accident occurs at work doesn’t mean your workers’ compensation policy will provide a payout. Some commonly excluded accidents include
Accident as a result of volunteering
Accident due to consumption of illegal substances (alcohol and hard drugs)
Off-site related injuries
Recreational injuries (workplace horseplay)
Let’s take a look at some high-level statistics on workers’ compensation in California.
Number of fatal injuries annually: 5,190 workers died as a result of fatal occupational injuries in the U.S. in 2016. In the same year, 422 workers died in California as a result of fatal occupational injuries.
Employer cost per $100 of covered payroll: In California, the employer cost per $100 of covered payroll in 2016 was $1.18.
National ranking (1= largest percentage increase from 2012–2016): California ranks 9th for the largest percentage increase in the cost of workers’ comp insurance.
Low rate per $100 in payroll: The low rate per $100 in payroll is $0.40 for clerical employees in California.
High rate per $100 in payroll: The highest rate per $100 in payroll is $33.57 for labor employees in California.
How Does California Workers’ Compensation Law Work?
Workers' compensation is a mandatory form of insurance coverage purchased by business owners. This type of insurance protects your employees and provides health care, disability, rehabilitation and death benefits for employees who suffer an injury or die as a result of a workplace accident.
In California, employers are required by law to provide their employees with a workers’ compensation insurance benefit. It is a criminal offense for an employer not to offer employees this benefit. The California Division of Workers' Compensation states that, as an employer, you must have a workman comp policy when you hire a California-based employee — even if your business is in another state.
Sole proprietorships and single-member LLC businesses are not required by law to obtain a workers’ compensation coverage if they don't have employees. This means that if you’re an independent contractor who works without a partner, you don’t need to purchase a workers’ compensation policy. However, as soon as you hire your first employee, you must buy a comprehensive workers’ compensation policy to continue operating within California law.
In California, workers' compensation benefits are awarded on a no-fault basis. This means that regardless of who is at fault, the employee still receives the benefit. As an employee, you should notify your employer immediately and offer written notification about the incident within 30 days. Employers are required to respond with a DWC1 claim form within a day of being informed about the accident. You’re also required to provide medical assistance up to $10,000 while the claim is still pending.
Workers' compensation premiums are paid based on your workers' exposure to danger and the impact of work impacted:
If your employees work in a high-risk industry (like logging or construction) you’ll pay more for your workers’ compensation insurance.
If your employees work in a low-risk industry (like in an office setting) you’ll pay less each month for your insurance.
Who Has to Carry Workers Compensation Insurance in California?
If you have a business in California that has at least 1 employee, then you are required by law to carry workers compensation insurance. Companies headquartered in another state with operations in California are not exempt and must provide workers compensation benefits to California employees. Sole proprietors are allowed to exempt themselves or elect to be covered by workers compensation insurance.
How Are California Workers Compensation Premiums Determined?
Workers compensation premiums are calculated based on how employees are classified according to their specific work duties and rates assigned to different classifications in the workplace. The classification of each employee can determine the amount an employer pays for workers compensation.
Each industry has a corresponding rate, expressed as dollars per $100 payroll for that particular rate; these rates correspond with codes used by insurance companies when calculating costs. Rates are determined by risk.
For example, a company that has employees who install roofs will have a higher rate per $100 of payroll than an employer that has office or clerical employees.
Average Cost of Workers Comp in CA
Cost depends on the type of business you have and how many employees you have. The larger the business and the more employees you have, the higher the workers compensation premium. Workers compensation can be a high cost to your business, especially if you do not purchase the best workers compensation insurance in California for your needs.
Workers’ compensation in California varies depending on the industry you work in. Let’s take a look at what you might expect to pay for your workers’ compensation policy. The following table assumes that you have 5 employees working under you and a state fee of $250.
Class Code
Class Code Description
Rate
Annual Pay
State Fee
Annual Employer Premium
0042
Landscaping service
$6.42
$31,714
$250
$11,430.20
9096
Residential Cleaning Service- Housekeepers
$12.36
$28,752
$250
$19,018.75
9102
Lawn Service and Maintenance
$11.13
$35,438
$250
$20,971.25
9426
Septic Tank Cleaning — Portable Toilets
$5.95
$46,868
$250
$15,193.25
7720
Security Guards — Patrol Officers
$2.65
$26,909
$250
$4,815.45
*This table assumes the employer has 5 employees with an experience modifier of 1 and a state fee of $250*
Why Do I Need Workers Compensation Insurance?
If you are a business owner and you do not carry this insurance and an employee gets injured on the job, you will likely be legally obligated to compensate them out of your pocket. Depending on the size of the claim, this expense could be devastating for a business.
How to Compare Workers Compensation Insurance
It’s best to consider 4 components when getting a quote for workers compensation:
Premiums – Look at the proposed monthly premium and the annual premium. Also, check out deductible amounts. The lower the annual premium that you pay per year, the less your overall cost is going to be over time. Some insurers have what is called a surcharge, which means the higher your payroll number is, the more you pay in premiums.
Coverage – Make sure you are comparing apples to apples regarding what is covered and what is not. Some insurers may cover certain injuries but not others, or some may cover firefighter injuries, for example, while others do not. It depends on the policy that you have.
Service Ratings – A good way to determine the quality of service you will receive is by looking at how well an insurer has performed when it comes to paying claims. Most insurers are rated either excellent or good, so try to find an insurer with a service rating of “excellent.” The Liberty Mutual workers compensation policy we recommended above has a “good” claim service rating but an “excellent” claim payment rating.
Market Share – This indication often demonstrates how satisfied other businesses are with a particular carrier. Carriers with a large share of the workers compensation market in California often have competitive rates and excellent claims-paying experience. However, carriers with a smaller market share may specialize in specific businesses and have lower premiums in that market.
How to Buy Workers Compensation Insurance
In California, you can buy workers compensation insurance through 3 methods. This may vary in other states.
Private Insurance
Buy through a private insurance carrier either directly or through an agent licensed to do business in California. Consider getting a quote from Progressive, biBERK, CoverWallet, Tivly or Liberty Mutual.
StateFund First
Purchase from the state fund called StateFund First. California’s state fund is a competitive fund, meaning it competes against private insurers for business.
Self-Insuring
Opt to self-insure. This option is generally chosen only by large employers. Employers who want to self-insure workers compensation must apply to the California Office of Self-Insurance (OSIP) to receive approval to self-insure. Employers that choose to self-insure often do so to save on insurance premiums or to gain more control over granting or denying workers compensation benefits. California has the largest number of employers self-insuring in the nation.
It is estimated that over 90% of California businesses and nonprofits are required to purchase workers compensation insurance. This requirement makes it an important business expense, so be sure you get the best workers comp insurance in California at the lowest price. We recommend you review the policies of commercial insurers like Progressive, biBERK, CoverWallet and Liberty Mutual or call an independent broker.
Get Affordable Workers Compensation Coverage
If you don’t have the best workers’ comp insurance in California, you could be putting your entire business at risk. The good news is that it's never been easier to get the coverage you need to keep your workers protected. Begin by getting a few quotes from competing companies. The best way to ensure that you aren’t overpaying for coverage is to know all your options.
Frequently Asked Questions
Q
How long can an employee stay on workers’ compensation?
A
The length of time that an employee can remain on workers’ compensation is set by the state. Usually, the range is from 3 to 7 years. In addition to that, there is generally not a limit for permanent disability benefits unless you live in a state that terminates the benefits at age 65. For employers seeking the cheapest workers’ compensation insurance, check out these top providers.
Q
Who pays for workers’ compensation benefits?
A
The employer is responsible for purchasing workers’ compensation insurance to cover the benefits of employees. The must pay a monthly premium based on class code and payroll. To get a custom workers’ compensation quote, click here.
Q
Do I have to get workers’ compensation insurance?
A
This depends on which state you have employees. The following states require workers; compensation under specific requirements: AK, CA, CO, CT, DE, HI, IL, IA, KS, KY, MD, MA, MI, MN, MS, NH, NJ, NY, NC, OH, OK, SC, SD, UT, WA. To get the best workers’ compensation premium, enter your zip code here.
Q
What should I do if I'm hurt on the job?
A
If the injury occurs on the job, an injured worker should contact their employer and file a workers compensation claim within 1 year of the date of the accident or the date they discovered they were injured. The employee would then be referred by the employer to see a doctor.
Q
Are worker's compensation benefits taxable?
A
Most workers compensation benefits are not taxable at the state or federal level.
Methodology
Benzinga crafted a specific methodology to rank workers comp insurance. We prioritized carriers based on coverage options, specialized industries, customer service experience and how quickly and easily you're able to get insured including online tool usage. We also included workers comp insurance quote aggregators in lists to make it easy and efficient to compare policy quotes and options. To see a comprehensive breakdown of our methodology, please visit see our Workers' Compensation Insurance Methodology page.
Most Dangerous Industries Per State
The construction industry reports the most injuries and workers' compensation claims in 38 out of 50 states.
Second place goes to the forestry industry, followed by the transportation industry. By law, businesses with more than 1 employee must carry workers' compensation insurance. Workers' compensation insurance protects both your business and employees and creates a safety net for wage replacements and medical benefits.
Use our calculator to determine how much workers' compensation will cost you and your business.
Maurice Draine is a former insurance agent, broker, underwriter tech, and agent sales support rep with over 15 years of professional writing experience. Maurice helps insurance, financial, and various online and ad agencies, create the words that drive customers to their websites and keeps them there.
