When you become an employer, you inherit the responsibility of protecting the business, as well as the employees. The State of California Workers’ Compensation Law requires you to have California workers’ compensation coverage, even if you have just one employee. If you are an out-of-state employer with an employee that works in California the majority of the time, you are also required to have California workers’ compensation coverage. California workers compensation coverage is, in basic terms, a trade-off between the employee and employer; this is where the differences between the Workers’ Compensation Insurance and the Employers’ Liability Insurance are evident.
The State of California workers’ Compensation has two parts. First, the California workers compensation insurance provides the necessary payments to cover any costs incurred by employees who are injured on the job or suffers from work-related illnesses. Through this, the employer will provide payments to the injured or sick employee, who in return, agrees to relinquish his/her right to sue the employer for negligence. Second, the California Employers’ liability Insurance provides the company protection against lawsuits due to job-related injuries or illness. The protection is for lawsuits that come from the employee, relatives, immediate family members, or third-parties related to the injured employee. It is important to note that Employers’ Liability Insurance does not cover the company against claims such as sexual discrimination, wrongful dismissal, or non-company-related third-parties, etc.
The employer will need to have both parts of coverage, no matter what steps they take to create a safe working environment for the employees. Anything can happen, no matter how light the job duties may be. An employee that does data entry 8 hours a day for 5 days a week can develop carpal tunnel syndrome over a long period of time; one occurrence of lifting a heavy box can result in a back injury. Injuries and illness that can arise from job duties and the work environment include the following:
• Amputation or loss of limbs
• Loss of hearing or vision
• Back or neck injuries
• Burns, scars or any disfigurements
• Muscle, tissue or nerve damage
• Head trauma or brain injury
• Repetitive stress injury, including carpal tunnel
• Occupational diseases from toxic exposure
Realize that both the Workers’ Compensation insurance and the Employers’ Liability Insurance are two different parts of Workers’ Compensation Coverage. When searching for a good insurance policy for the company, ask about both insurances and what each will cover for the company.
To purchase both parts of California workers compensation insurance policy, find a reliable, licensed insurance broker that is authorized to write policies in California or become self-insured. The State of California workers compensation law is required to protect both the employer and employee, so choosing a policy that is right for your company must be done with much consideration. Go to California Department of Insurance website, to find an authorized Insurance Broker that is right for the Company; be sure to confirm that they are authorized to write an insurance policy in California.
Have you ever been involved with a worker’s comp claim? Feel free to share your thoughts in the comments section below.