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Top 6 Providers of Workers Compensation Insurance in California

California has the second most expensive workers compensation insurance in the country—only New York has higher rates. This is because the cost of living in California is higher than most areas of the country, so the rates for insurance are similarly high. You’ll need workers compensation insurance if you have even one employee in California. Obviously, you don’t want to spend more money than you have to, so here are the top providers of workers compensation insurance in California. 

All the quoted rates assumed a café with 5 employees and $160,000 in payroll.

Top 6 Providers of Workers Compensation Insurance in California

We crunched the numbers and studied 12 companies offering workers compensation insurance in California. Here are the top 6 companies that we recommend:

California State Compensation Insurance Fund: Best Overall

This state sponsored guarantees coverage for employers in California. It competes with private insurers and offers quotes online. They may have discounts for high-premium industries. In spite of the name, they are not part of the State of California. They insure almost a quarter of all California businesses. You can get an online quote by filling out your payroll, business address and business type and they’ll figure out the rest. 

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Pie Insurance: Best Online Quotes and Purchase and Reasonable Rates

Pie is a relatively new company that specializes in online workers compensation insurance. They claim you can save up to 30%, although they weren’t the lowest quote we got. It is fast and easy to get a quote, though, and you can purchase insurance online and be on your way in less than ten minutes. They have excellent reviews, with most customers praising how fast and easy the whole process was. Read our review of Pie Insurance

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The Hartford: Best for Added Coverages and Highly Reputable Insurance Company

The Hartford specializes in small business insurance and has over 5,000 positive reviews. They also have six added coverages to their basic workers compensation insurance, such as extended deadline stop gap coverage and voluntary compensation. You can also choose pay-as-you-go insurance, which makes budgeting easier. Should you need other types of business insurance, The Hartford can do that. 

We couldn’t get a quote from The Hartford. After we put in all of our information, they told us to call them. You’ll need your FEIN to get insurance. 

Read our review of the Hartford Small Business Insurance

Biberk: Best for Online Quotes and Purchase and Financial Strength

It’s super easy to get a quote from Biberk. Just enter your total employee payroll, business address and a few other details, and you get a quote in less than five minutes. You can pay online and get coverage instantly, and your coverage will start immediately. Since they’re a part of Berkshire Hathaway, you can’t get better financial stability. 

The quote below is for a Sacramento based café with 5 employees and $160,000 in payroll. 

Read our review of Biberk Small Business Insurance

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Huckleberry: Best for Affordable Monthly Rates

Huckleberry is a new company, and 100% paperless. You can get a quote, pay, and get insured online, usually in less than five minutes. If you choose pay-as-you-go insurance, you won’t need a down payment. They serve 12 major industries and are backed by Markel, who does their underwriting. 

This isn’t a quote, per se, but a rough estimate. If you have your FEIN number you’ll get an actual quote. When you see an option to buy, you’ll know that your quote is what you’ll pay. 

Read our review of Huckleberry Small Business Insurance

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Hiscox: Best from a reputable small business insurance specialist

Over 400,000 small businesses choose Hiscox who has specialized in offering business insurance to small businesses. In addition to workers compensation insurance, they also have general liability, E & O insurance, cyber security, and more, so if you need multiple policies they can accommodate you. They also have excellent financial strength. You can get a quote online, although we were unable to secure one for our made-up business. You can buy insurance either online or through an agent. 

Read our review of Hiscox Small Business Insurance

Workers Compensation Laws in California

You have to have workers compensation insurance even if you have only one employee. You must provide workers compensation insurance to a California employee even if your business is in another state. Sole proprietors don’t have to have workers compensation, unless you’re a roofer. If you have only part-time employees, you still need workers compensation insurance.

Businesses that use independent contractors only don’t have to have workers compensation insurance, but you may want to require them to get their own workers compensation insurance. You also need to be careful in how you classify employees, as many people falsely believe they are independent contractors when they are actually employees. The IRS can tell you about this. 

There are penalties for not having workers compensation insurance, which include either a $10,000 fine or imprisonment for up to a year, or both. If a worker files a claim that goes to the Workers Compensation Appeals Board, you can be fined up to $10,000 per employee if the injury was found to be compensable and $2,000 per employee if it’s not, for a maximum of $100,000. 

AB5 reclassified some employees from gig economy workers to employees, so now you have to insure them, too. 

How to Save Money on Workers Compensation Insurance

  • Opt for pay-as-you-go workers comp. The insurance is the same, but since it there are no up-front costs and it’s based on payroll, you get more accurate payments.
  • Check professional organizations or trade associations for group rates
  • Have a documented safety program. Actually, this is a requirement in California, so having one won’t save you money, but you still need one. 
  • Consider drug testing to insure a substance-free workplace.
  • Check to make sure classification codes are accurate.
  • Shop around and compare quotes.

Factors Affecting How Much You’ll Pay 

Many things go into how much you pay in workers compensation insurance, but the biggest one is what industry you work in and how much risk is involved. People who work in roofing or construction are exposed to more risk, and therefore pay more. Other things affecting rates include:

  • Amount of payroll
  • Number of employees
  • Claim history
  • Size of business
  • State laws

Some states, such as California, charge more for insurance because the overall cost of living is higher. And some, such as California, just have stricter laws. This is why California has high rates for workers compensation insurance. 

What does Workers Compensation Insurance Cover?

Workers compensation insurance covers:

  • Medical expenses for injured or ill employees
  • Rehabilitation expenses
  • Disability payments
  • Employer liability (if an employee or their family sues you)
  • Supplemental job displacement vouchers (these help with retraining costs if your employee becomes disabled and can’t do their original job)
  • Death benefits (if your employee dies from a work-related accident or illness)

>>MORE: How to Find Cheap Workers Compensation Insurance?

>>MORE: Best 7 Workers’ Compensation Insurance Companies for Small Business

How is Workers Compensation Insurance Different from General Liability Insurance?

General liability insurance protects your business from claims that you caused:

  • Property damage (to someone else’s property, not your own)
  • Bodily injuries to clients 
  • Advertising injuries (slander, copyright infringement, and the like)

General liability insurance does not cover your employees if they get injured on the job—that’s workers compensation insurance. General liability only covers you if a client or a customer injures themselves on your work site. Also, if an employee gets hurt at work and receives workers compensation benefits, they can’t sue and say you were negligent. They can sue you if workers compensation doesn’t cover their loss, though.

>>MORE: Cheapest General Liability Insurance for Small Businesses

Last Thoughts

Workers compensation insurance is both necessary and required in California. Don’t risk your business by skipping it. Shop around and get the best rates, and stress safety in the workplace.

>>MORE: Top 5 Providers of Professional Liability Insurance in California

>>MORE: Top 6 Providers of General Liability Insurance in California

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