3 minute readBusiness
In California, workers' compensation is required as soon as you have employees. It pays medical care, lost wages, and disability benefits for work-related injuries, and it protects the business from most injury lawsuits by employees. Premium is based on payroll and job classification.
What you need to know
How premium is calculated
Payroll by class code, times a rate, times an experience modifier once your business is large enough to be rated.
Officers and owners
Sole proprietors and certain officers may be excluded or may elect coverage. The election has real consequences.
Classification accuracy matters
Misclassified payroll shows up at audit, often as an unwelcome additional premium.
Common mistakes
- Setting property and income limits from rounded-down guesses instead of real numbers.
- Skipping hired and non-owned auto because the business owns no vehicles.
- Signing contracts that require limits or wording the policy does not provide.
- Letting subcontractor certificates lapse, which shows up at audit.
- Treating insurance as a one-time purchase while the business keeps changing.
When to talk to an agent
Talk to an agent before signing a lease or a major contract, when you hire your first employee, when revenue or payroll changes materially, and any time you add a service, location or vehicle.
Frequently asked
This article is general information, not a policy or a promise of coverage. What your policy pays depends on its specific terms, limits and exclusions. Ask us to review your actual policy before making a decision.