Q: Are all California businesses required to carry Workers Compensation Insurance?
A: ALL California employers must provide coverage for their California employees
Q: Where do we get the information we post on our blog site?
A: The Department of Insurance website, The WCIRB, The Insurance Journal and many other trusted sources
Q: Why is Workers Compensation Insurance a necessary requirement?
A: It is illegal in the state of California to not carry it. There will be penalties, fines and many other consequences if a worker is injured and you do not carry it. Furthermore if there is a claim and you do not have California Workers Compensation Insurance at the time the employer is still liable for all costs relating to the injury which can be devastating to any company.
Q: Who regulates and makes California Workers Compensation laws?
A: The Department of Insurance regulates the laws and the State Senate makes them
Q: Why is California Workers Comp Insurance so expensive?
A: Largely because of claims that occur, experience modifications, fraud and payroll amounts statewide
Q: What is an experience modification?
A: It’s a percentage that compares the payroll and loss history of your company to a similar-sized company within the same industry. For example, if a company has a better than average loss record, their experience modification would be less than 100%. If that is the case you would receive a credit on your Workers Comp rates. If that is not the case however it would result in the opposite, an increase in rates. The experience modification can be closely compared to an individual’s credit score.
Q: How does your insurance carrier determine what your experience modification number is?
A: This is calculated based on your payroll, premium paid and by your reported losses for the last three consecutive years
Q: What is a Classification or a class code?
A: It’s a component used determine the price an employer pays for their workers' comp insurance premium. Classifications are established for each industry and typically include all jobs or operations within a particular business.
Q: Who determines the classification for your company?
A: It is determined by the insurance carrier based off of the WCIRB’s (Workers Compensation Insurance Rating Bureau) standard classification codes