Workers’ comp pays for medical care and part of lost wages when an employee is hurt or gets sick because of the job. It also protects the business from many injury lawsuits. CBIS places workers’ comp with carriers for businesses all over San Diego County, from small offices in Santee to contractors running several crews.
Pay-as-you-go workers’ comp
With a standard policy, you usually pay a deposit up front based on an estimate of next year’s payroll. If you end up hiring more than you planned, the audit after the policy ends can bring a bill you didn’t see coming.
Pay-as-you-go works off real numbers. Your premium is figured from the payroll you actually run each pay period, usually through your payroll company. There’s no big deposit built on a guess, which can mean fewer surprises at audit time.
It tends to suit businesses whose payroll moves around: seasonal work, a team that’s growing, or contractors with jobs that start and stop. Whether it fits your business depends on your payroll setup and on the carrier. Not every carrier offers it for every type of work. For more detail, read Pay-As-You-Go Workers’ Comp: What San Diego Business Owners Should Know.
Who needs workers’ comp in California?
If you have one employee, you need workers’ comp. California law requires it for nearly every employer, and that includes part-time and seasonal help. Going without it can bring state penalties, and the business could end up paying an injured worker’s costs itself.
The harder question is who counts. Owners, corporate officers, partners, family members, and people you pay as contractors can each be treated differently. If you’re not sure, ask one of our licensed agents before you buy or renew.
What workers’ comp covers
California rules set the benefits. In general, a policy may pay for:
- Medical care. Doctor visits, hospital care, and prescriptions for a covered work injury or illness.
- Lost wages. Partial pay while the employee can’t work, up to state limits.
- Retraining. Help getting back to work when someone can’t return to the same job.
- Death benefits. Support for a spouse or dependents if a worker dies from a job injury or illness.
Most policies also include employer’s liability coverage, which can help if the business is sued over a work injury. What applies to you depends on the carrier and the policy.
Industries CBIS works with
The type of work drives the policy. A restaurant and a roofing company with the same payroll will get very different quotes.
We regularly quote workers’ comp for contractors and specialty trades, restaurants and bars, retail stores, offices and professional firms, medical and dental practices, and landscaping and property service companies.
Some kinds of work are harder to place. Because we’re independent, we can take a tough risk to more than one carrier instead of stopping at the first “no.”
What affects the cost of workers’ comp
- Class codes. Every job type has a classification, and clerical work is priced very differently from framing. A wrong code means paying for the wrong risk.
- Payroll. Premium is figured per class code from your payroll, so it moves as your team grows or shrinks.
- Claims history. Past claims matter. Some employers also have an experience modification factor, or “X-mod,” that compares their claims to similar businesses.
- Safety. Carriers may look at written safety plans, training, and return-to-work programs.
Two carriers can price the same business differently. That’s the main reason to compare.
How CBIS helps
We shop your policy with more than one carrier.
Before quoting, an agent goes through your class codes and payroll with you. At renewal, we look at the policy again and check it against other carriers. When the audit letter shows up, we can help you pull payroll records together and go over the results.
Already have a policy? We can review it. You don’t have to switch.
Need other coverage too? See what insurance does my business need?
Workers’ comp questions
Do I need workers’ comp in California if I have one employee, or none?
Yes, as soon as you have one employee, and that includes part-time and seasonal help. A sole proprietor with no employees generally doesn’t have to carry it. Contractors are the exception: the Contractors State License Board requires C-8 (concrete), C-20 (HVAC), C-22 (asbestos abatement), C-39 (roofing) and C-61/D-49 (tree service) licensees to carry workers’ comp even with no employees. Clients and general contractors may also ask for a certificate before you start a job. If you’re not sure where you fall, call or text CBIS at (858) 283-7575.
Do I need workers’ comp for 1099 contractors?
Not automatically, because a 1099 doesn’t decide whether someone is really a contractor. Under California’s ABC test from AB5, a worker is an employee unless the business can show all three of these: the worker is free from your control, does work outside your usual line of business, and runs an independent business doing that kind of work. A few occupations follow different rules. A worker who fails the test is an employee and must be covered. At audit, the carrier can count payments to uninsured contractors as payroll and charge premium on them, so get a current workers’ comp certificate from every subcontractor who has employees.
How much does workers’ comp cost for a small business in California?
There’s no single price. Each carrier files its own rates with the California Department of Insurance, usually as a rate per $100 of payroll for each job class code. Your premium depends on your payroll, the work your employees do, your claims history (including an experience mod, if you have one) and how the carrier prices your business. Rates for the same business can differ a lot from one carrier to the next, so CBIS can often quote more than one carrier and let you compare.
What’s the penalty for not having workers’ comp in California?
The Labor Commissioner can issue a stop order that bars you from using employee labor until you have coverage, and you may have to pay affected employees for up to 10 days of lost time. The state can also assess penalties for each employee you had without coverage. Going without coverage is a misdemeanor. If an employee gets hurt, the business can end up paying the injury costs itself and can also be sued.
What is pay-as-you-go workers’ comp, and how does it work with my payroll?
Pay-as-you-go bases your premium on the payroll you actually run each pay period, not on a yearly estimate paid up front. Your payroll company reports wages to the carrier each time you run payroll, and the premium for that period is paid then. If your team grows or shrinks, the premium follows. CBIS works with most payroll companies, so you can often keep the one you already use.
Does pay-as-you-go mean no audit, and can every business get it?
No. The carrier still audits after the policy term ends. Because your premium has tracked real payroll, the audit adjustment may be smaller, but a wrong class code or payments to uninsured subcontractors can still change what you owe. Not every business qualifies, since it depends on the carrier, the type of work and your payroll setup. CBIS can check whether it’s an option for you.
What happens at a workers’ comp audit, and why might I get an audit bill?
After the policy term ends, the carrier compares your actual payroll, job duties and class codes with the estimates on the policy, and the final premium can go up or down. A bill usually comes from payroll running higher than estimated, work that belonged in a higher-rated class code, or payments to uninsured contractors counted as payroll. If you split one employee’s pay between class codes, keep time records to back it up, or the carrier can put all of it in the highest-rated code. Have your payroll and tax records and your subcontractor certificates on hand. CBIS can help you go through the records and the results.
Can owners, officers or LLC members be excluded?
Often, yes, because owners aren’t automatically covered. A sole proprietor is covered only if the policy adds them. A corporate officer who is the only shareholder is excluded automatically unless they choose coverage, and other officers and directors with a qualifying ownership stake, LLC managing members and general partners can be excluded by signing a written waiver. A waiver takes effect only once the carrier receives and accepts it, so confirm it’s on your policy at each renewal. Some contractor license types must carry coverage even with no employees, so check before you plan around an exclusion.
Do family members who help out need to be covered?
Usually, yes. A relative who works in your business, even a few hours a day, is generally an employee who must be covered, and being family doesn’t change that. The exceptions are narrow and depend on how the business is set up, such as a partnership where only the partners work or a corporation owned entirely by its officers. Talk to CBIS before you leave anyone off the policy.
What is a class code, and how do I know mine is right?
A class code is the 4-digit classification California uses for each type of work, and carriers set their rates by it. If yours is wrong, you pay for the wrong risk, or you get a correction and possibly a bill at audit. The codes on your policy should match what your employees actually do, and you can look up descriptions in the Classification Search from the Workers’ Compensation Insurance Rating Bureau (WCIRB). CBIS reviews your class codes with you before quoting and again at renewal.
What is an experience mod, and does my business have one?
An experience mod, or X-mod, is a percentage that compares your claims history with other businesses of similar type and size. Under 100% generally means better than average, and over 100% means worse. The Workers’ Compensation Insurance Rating Bureau (WCIRB) calculates it, and only businesses that meet a size threshold it sets get one, so many very small businesses don’t have one. If you do have one, it applies to your policy no matter which carrier you choose.
How fast can I get coverage?
CBIS can usually get coverage started within a few days once a carrier approves your application. For a quote, have ready your business type, what your employees do, estimated payroll by job type, and any past coverage and claims. Coverage starts only when the carrier issues it, so wait for confirmation before you count on it. Whether you’re in San Diego County or elsewhere in California, call or text CBIS at (858) 283-7575 to get started.
What should I do if an employee gets hurt at work?
Get the employee medical care first, and call 911 in an emergency. If the injury needs more than first aid or costs lost time, give the employee a DWC-1 claim form within one working day of learning about it; employees should report injuries within 30 days. Send the completed form to your carrier right away, along with your Employer’s Report of Occupational Injury or Illness (Form 5020), which is due within five days of learning about the injury. A serious injury, illness or death must also be reported to Cal/OSHA immediately. The carrier handles and pays the claim, and CBIS can help with the paperwork.
Get a workers’ comp coverage review
Tell us about your business, your payroll, and the kind of work your team does. A licensed agent will follow up with options. You can also call or text the main office at (858) 283-7575.