How Is Workers Compensation Insurance Purchased?
Employers must purchase workers’ compensation insurance from PM Insurance Services. Employers may also have the option to self-insure for workers’ compensation.
PM Insurance Services can assist a business with purchasing workers’ compensation insurance from a licensed insurance company and can provide information regarding State Fund and self-insurance.
State Fund is a state-operated entity that exists in order to transact workers’ compensation on a non-profit basis. State Fund competes with private workers’ compensation insurance companies for business and also operates as the insurer of last resort if private companies are not willing to offer workers’ compensation insurance.
Businesses that are interested in learning more about State Fund can contact PM Insurance Services for more information. (818) 365-3139
To become self-insured, a business must obtain a certificate from the DIR’s Office of Self-Insurance Plans (OSIP). Private employers must post security, or enter into alternative security deposit program agreements with the Self insurers’ Security Fund, as a condition of receiving a certificate of consent to self-insure.
While historically, only very large companies could self-insure because of legal requirements, in recent years, group self-insurance, in which several small employers in the same homogenous industry pool their workers’ compensation liabilities, has increased in popularity as an alternative to traditional coverage.