Workers' Compensation Insurance

If you have employees in California, workers’ compensation insurance isn’t optional. It is required by law for every employer with even one employee, and it protects both your workers and your business when someone gets hurt on the job. Pacific Southwest Insurance Services helps contractors, trucking companies, restaurants, landlords and small businesses find the right workers’ comp policy at a competitive price.

Get a free workers’ comp quote. Call (818) 701-1033 or email info@pswinsurance.com. Office hours are Monday to Friday, 9:30 AM to 5:00 PM.

What Is Workers’ Compensation Insurance?

Workers’ compensation is insurance that pays for medical care and lost wages when an employee is injured or becomes ill because of their job. It is a “no-fault” system: the injured worker receives benefits no matter who caused the accident, and in most cases the employee cannot sue the employer over the injury. That trade-off protects your business from costly lawsuits.

What Workers’ Comp Covers

A workers’ compensation policy has two parts.

Part One: Workers’ Compensation Benefits

Part One pays the benefits California law requires for work-related injuries and illnesses:

• Medical care: doctor visits, hospital care, surgery, prescriptions, physical therapy, medical equipment and mileage to medical appointments.
• Temporary disability: partial wage replacement while the employee can’t work during recovery, generally about two-thirds of their average weekly pay, up to limits set by the state.
• Permanent disability: payments when an injury permanently limits the employee’s ability to work, based on a disability rating.
• Supplemental job displacement benefit: a voucher for retraining or skill upgrades when a permanently disabled employee can’t return to their old job and the employer doesn’t offer other work.
• Death benefits: burial expenses and payments to the surviving dependents if an employee dies from a work injury or illness.

Part Two: Employer’s Liability

Part Two protects your business if you are sued in connection with a work injury that isn’t handled only through the workers’ comp system, for example a lawsuit from an injured worker’s spouse, or a claim brought against you by another company. It pays your legal defense and covered damages up to the policy limits.

Examples of Covered Injuries

• A roofer falls from a ladder and breaks a wrist
• A delivery driver is hurt in an accident while on the route
• A warehouse worker injures their back lifting boxes
• A cook is burned in the kitchen
• An office employee develops carpal tunnel from repetitive work
• A landscaper is cut by equipment

What Workers’ Comp Does Not Cover

• Injuries to true independent contractors (but in California, many workers treated as contractors are legally employees)
• Injuries caused by the employee’s intoxication, or by a fight the employee started
• Intentionally self-inflicted injuries
• Injuries from voluntary off-duty recreational activities that aren’t part of the job
• Injuries during a normal commute to and from work, in most cases
• Injuries to customers or the public (these are covered by general liability insurance)
• Damage to vehicles or equipment (covered by commercial auto and property policies)

Who Needs Workers’ Comp in California?

• Every employer with one or more employees, including part-time and seasonal workers. Coverage must be in place before the first employee starts.
• Contractors in certain trades, even with no employees. The Contractors State License Board requires workers’ comp for concrete (C-8), HVAC (C-20), asbestos abatement (C-22), roofing (C-39) and tree service (C-49) licenses. A law requiring all licensed contractors to carry it is scheduled to take effect January 1, 2028.
• Businesses whose contracts require it. General contractors, property managers and many customers ask for a certificate of workers’ comp and sometimes a waiver of subrogation.

Corporate officers and directors are generally included, but if the corporation is owned entirely by its officers and directors, they may choose to be excluded. Sole proprietors and partners are not required to cover themselves, but they can choose to.

Penalties for Not Having Workers’ Comp

California takes this seriously. An uninsured employer can face a stop order that shuts down work until coverage is in place, large state penalties, and criminal charges. The employer can also be held personally responsible for the full cost of an injured worker’s medical care and benefits. See the California Division of Workers’ Compensation employer FAQs for details.

How Workers’ Comp Premiums Are Calculated

• Payroll: premiums are based on payroll, usually priced per $100 of payroll.
• Classification codes: each type of job has its own rate. A roofer costs more to insure than an office clerk.
• Experience modification (X-Mod): businesses with a claims history better than average for their industry can get a lower rate, and those with worse history pay more.
• Payroll audit: at the end of the policy term, the insurer compares your estimated payroll to your actual payroll and adjusts the premium.

Ways to Lower Your Workers’ Comp Cost

• Make sure every employee is in the correct classification code
• Keep accurate payroll records for your annual audit
• Have a written safety program and train employees
• Report injuries right away and help injured workers return to modified duty
• Ask about pay-as-you-go billing, which ties payments to each payroll

What to Have Ready for a Quote

• Business name, address and type of work
• Number of employees and what each one does
• Estimated annual payroll by job type
• Owners and officers to include or exclude
• Current policy and loss runs (claims history), if you have them
• Your contractor license number, if you are a contractor

Why Choose Pacific Southwest Insurance Services

• Family-owned and serving California since 1965
• Independent agency: we compare multiple workers’ comp insurance companies
• Experience with contractors, trucking, restaurants and hard-to-place businesses
• Fast certificates of insurance and waivers of subrogation for your contracts
• One agency for workers’ comp, general liability, commercial auto, property and bonds
• Se habla español

Frequently Asked Questions

Do I need workers’ comp if I only have one employee?

Yes. California requires every employer with one or more employees to carry workers’ compensation, including part-time employees.

Does workers’ comp cover me as the business owner?

Sole proprietors and partners are not required to cover themselves but can choose to. Corporate officers are generally covered unless they own the entire corporation and elect to be excluded.

Do I need workers’ comp for independent contractors?

True independent contractors are not covered. But California uses a strict test to decide who is an employee, and many workers paid as contractors are legally employees. If an uninsured “contractor” is hurt, you could be responsible. Talk to us about how you pay your workers.

I’m a contractor with no employees. Do I need workers’ comp?

It depends on your license. Concrete, HVAC, asbestos abatement, roofing and tree service contractors must carry it now, even with no employees. A requirement for all licensed contractors is scheduled for January 1, 2028.

How much does workers’ comp cost?

It depends on your payroll, the type of work your employees do and your claims history. Office jobs cost far less than construction or trucking. Call us for a quote based on your business.

What’s the difference between workers’ comp and general liability?

Workers’ comp covers injuries to your own employees. General liability covers injuries to customers and other people, and damage to their property.

Related Coverage

• General Liability Insurance
• Commercial Auto Insurance
• Business Insurance
• Contractor License Bonds

Get a Workers’ Compensation Quote

Tell us about your business and we’ll shop the market for you. Call (818) 701-1033, email info@pswinsurance.com, fill out the quote form below, or visit our office at 9036 Reseda Blvd., Suite 105, Northridge, CA.