California Workers' Compensation
Your Guide to Workers' Comp Insurance in California
Find the right workers' comp insurance policy for you.

In recent years, California has paid out $12.247 billion in workers' comp claims. Work-related injuries happen every day, from trips and falls to life-altering injuries, but having the right workers' comp coverage can help protect your business. For help navigating workers comp insurance coverage, find a local independent agent.
Workers' Compensation Coverages/Non-Coverages in California
Employees need help paying for medical bills when they get injured on the job. Workers’ compensation insurance is designed to protect employees from the costs of workplace injuries, and protect employers from lawsuits and other unpredictable costs.
Here's a closer look at what workers' compensation covers and does not cover in the state of California.
Workers' comp covers the following:
- Traumatic injuries
- Repetitive-type injuries
- Certain mental injuries
- Occupational diseases
Real-life example of coverage:
An actress at a major movie studio in California gets injured while filming on set. The employee gets taken to the hospital to be treated for minor injuries. A workers' comp policy would help pay for any related medical treatments and other costs.
Workers' comp does not cover:
- Employee illnesses or injuries sustained outside of work
- Accidents that occur while an employee is intoxicated
- Intentional employee injuries to themselves at the workplace
Workers' Compensation Coverage | Covered | Not Covered |
Traumatic injuries |
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Repetitive-type injuries |
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Certain mental injuries |
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Occupational diseases |
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Employee illnesses or injuries sustained outside of work |
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Accidents that occur while an employee is intoxicated |
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Intentional employee injuries to themselves at the workplace |
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An independent insurance agent can further explain what workers' compensation insurance both covers and excludes in California.
Why Do You Need Workers' Compensation Insurance in California?
Workers' comp insurance is a necessity for most businesses for several reasons. For starters, it's actually required by law in most states, if your business has employees. Workers' comp also provides critical protection for your business against financial losses.
For most states, workers' comp is required immediately upon hiring a new employee. You'll want to be equipped with coverage before any of your workers get injured or ill on the job so that your business won't be held financially liable. Coverage doesn't kick in for workplace incidents until after you purchase a policy.
What Consequences Could You Face if You Don’t Have Workers’ Compensation in California?
If your business doesn't carry workers' comp to protect your team, you could end up facing legal consequences like fines or jail time. Though some businesses think of workers' comp as optional or unnecessary due to the nature of their operations, coverage can provide important financial protection in case of an incident.
Workers' comp is mandatory in most states, including California, if your business has one or more employees. Business owners in California without the right workers' comp insurance can be subject to fines of $10,000 or more, or imprisonment for up to one year.
California Workers’ Compensation Laws
California workers’ compensation laws require employers to provide no-fault insurance against workplace injuries and illnesses. In return, employers are not subject to lawsuits that could be filed by employees who get hurt or sick while on the job. Employers also cannot require employees to pay for or offset the cost of the policy, and benefits must cover all workers.
Failing to have workers’ compensation insurance in California is a criminal offense. The California Division of Workers’ Compensation oversees the administration of claims and runs the workers’ compensation court system that resolves disputes over benefits. It is illegal to punish or fire an employee for filing a workers’ compensation claim.
How Much Does California Workers’ Compensation Insurance Cost?
Workers’ compensation insurance always costs more for industries and occupations that are presumed to have a higher risk of occupational injuries or illnesses. Cost is determined by how many employees you have, the types of jobs they perform, and your history of accidents and workers’ compensation claims.
In California, the National Council for Compensation Insurance (NCCI) assigns classification codes for each occupation. Each class code is given a recommended base rate for workers’ comp. For the premium, an employer’s annual payroll at the start of the policy period is divided by 100 and then multiplied by the base rate.
Consider the following example:
- Classification Code 0042: Landscaper
- Base Rate: $7.71
- Employer payroll (example): $100,000
- Premium calculation: $7.71 per $100 of employer payroll (or 7.71% of payroll)
- Estimated annual premium for sample landscaper: $7,710.00
An employer may have more than one classification that is included in its workers’ compensation premium calculation. All of an employer’s classifications and related premiums are combined to determine the full workers' comp premium.
Recent California Workers’ Compensation Base Rate Examples
California workers' comp base rates vary by class code and insurance company underwriting guidelines. Experience rating is available for some employers. California workers’ compensation insurance is the most expensive in the U.S., but rates can vary significantly between insurance companies. The workers’ compensation market in California fluctuates, and insurance companies frequently enter and exit the market.
Here are a few recent sample base rates (rate per $100 of employer payroll) for select California class codes:
- 0042 Landscaping: $7.71
- 3632 Machine Shop: $3.70
- 5027 Masonry: $14.63
- 5183 Plumbing: $7.01
- 5190 Electrical: $5.68
- 8810 Clerical: $0.40
- 9079 Restaurant/Bar: $4.34
Workers' Comp Cost Per Employee in California
The cost of workers' comp coverage per employee increases with higher company payrolls, as these businesses cost more to insure. Check out a breakdown of how workers' comp costs vary by payroll range in each specific industry below.
Annual Workers' Comp Cost Per Employee
Industry | Lower Cost | Medium Cost | Upper Cost |
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Construction | $1,799 | $3,448 | $13,194 |
Finance and Insurance | $593 | $1,070 | $3,916 |
Hotels / Motels | $435 | $976 | $4,124 |
Manufacturing and Food Production | $769 | $1,462 | $5,557 |
Professional and Technical Services | $556 | $1,101 | $4,307 |
Real Estate | $100 | $199 | $780 |
Restaurants and Taverns | $177 | $394 | $1,655 |
Retail Trade | $339 | $651 | $2,492 |
Transportation and Warehousing | $1,325 | $2,610 | $10,175 |
Businesses that have a greater track-record of safety and fewer accidents pay less for their coverage. Insurance companies have complex formulas to reset your rates after an accident, likely leading to a noticeable spike in your premiums.
Best Workers' Comp Companies in California
Workers' comp is available from many different insurance companies in California. Here are just a few of our top picks for quality workers' comp insurance carriers.
Top Workers' Compensation Insurance Companies | Star Rating |
Travelers |
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Liberty Mutual |
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Builders & Tradesmen's Insurance |
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Accident Fund |
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EMC |
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ICW Group |
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An independent insurance agent can help you look into these workers' comp insurance companies and get matched to the carrier who best meets your needs at the most affordable rate.
Top 6 Most Common Workers' Comp Claims/Injuries

- Lacerations: In other words, deep cuts. These can happen in any industry, but are especially common in the restaurant and manufacturing fields.
- Sprains/strains: Again, these injuries can happen in any industry, but are especially common in job settings where lots of twisting and turning is required.
- Contusions: In other words, bruises and other marks on the skin caused by impact. Contusions often happen from dropped objects, improper lifting, or colliding with an object.
- Burns: Burns can happen in any industry that has a heat source, including restaurants, construction businesses, bakeries, and more.
- Eye injuries: Eye injuries are most frequent in industries that require chemicals, including manufacturing, painting, and construction.
- Fractures: Fractures can happen to employees anywhere, but are especially common in industries that require a lot of movement and the use of heavy machinery.
Why Are Independent Insurance Agents Awesome?
It’s simple. Independent insurance agents simplify the process by shopping and comparing insurance quotes for you. Not only that, but they’ll also cut the jargon and clarify the fine print, so you know exactly what you’re getting.
There’s no business too small for our independent insurance agents. They have access to multiple insurance companies, ultimately finding you the best workers' comp coverage and competitive pricing while working for you.
TrustedChoice.com Article | Reviewed by Paul Martin
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https://www.dir.ca.gov/dwc/faqs.html
https://www.employers.com/blog/2019/7-common-workers-compensation-claim-injuries/