What Is Workers’ Compensation Insurance Coverage?
Workers’ compensation insurance, also known as workman’s comp or workers’ comp, gives your employees benefits if they get injured or become ill from their job. These benefits can help:
- Cover their medical care and medical treatment
- Replace most of their lost wages if they take time off from work to recover
- Provide disability benefits
- Give death benefits, like helping pay for a funeral if they lose their life in a work accident or from a job-related illness
Workers’ comp also has benefits for you, the small business owner. It includes liability insurance coverage. So, if your business faces lawsuits from injured workers or their families, workers’ comp can help pay for your legal costs.
How Much Is Workers’ Compensation Insurance?
According to policy data, most customers with less than $300,000 in payroll pay an average of $70 a month for workers’ compensation insurance.
Is Workers’ Compensation Mandatory in California?
California businesses with at least one part-time or full-time employee must get workers’ compensation insurance. The state defines an employee as a person working for a company, whether the arrangement is:
- Expressed or implied
- Oral or written
- For lawful or unlawful unemployment
There are certain people who fall under the workers’ compensation exemption in California, such as:
- Sole proprietors, who can elect to have coverage
- Executive officers and directors if they fully own the business
- LLC members who don’t work in the business