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The 7 Best Workers Comp Insurance in California for 2022

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 7 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 7 companies that we recommend:

CoverWallet: Best for comparing several quotes online

CoverWallet is a digital broker specializing in small business insurance. They work with several leading insurance companies and are able to provide you with quotes from these companies. The quote application is relatively simple and straightforward. It shouldn’t take you more than 10 minutes to get multiple quotes from multiple companies to compare.

If you want to compare several quotes online to choose the cheapest one for your company, you may want to start with CoverWallet. After buying a policy from CoverWallet, you will be able to manage all of your small business insurance through its digital platform as well.

CoverWallet has a good rating from its customers, earning a A rating on BBB. Here is a quote sample from CoverWallet:

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 buy workers comp insurance in California?

Small businesses have several options to buy workers comp insurance:

  • Buy it from a digital broker
  • Buy it from a traditional insurance company
  • Buy it from an insuretech
  • Apply for self-insurance
  • Buy it from the State Fund

Each option has its pros and cons. The important factor is to find options that you can compare several quotes and buy online easily. Learn more at California Workers Comp Insurance: How to Compare Quotes and Buy Online.

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 for Workers Compensation Insurance

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. 

How Much does Workers Compensation Insurance Cost in California?

California requires workers compensation insurance if you have even one employee, even if they’re part-time. California workers compensation insurance costs $1.56 per $100 of payroll. This is multiplied by the class code of the employee and then multiplied by how many employees you have. Some examples of how much different class codes will cost you:

  • Clerical: $.040 
  • Restaurant/Bar staff: $4.34
  • Plumbing: $7.01
  • Masonry: $14.63
  • Laborer: $33.57  

Clerical is the cheapest classification, and laborers are the most expensive, at $33.57. So if you are employees many laborers at your company, workers compensation insurance can become very expensive, almost 1/3 of your total payroll. Be sure to shop around with a few companies or a digital broker like CoverWallet so that you can compare several quotes to decide on the cheapest one for your company.

Below is a summary of workers comp insurance costs for a small cafe in Culver City, California from several insurance companies that we are able to get quotes from.

CarriersMonthly workers comp insurance costs
Guard (through CoverWallet)$297
Pie$378
California State Compensation Insurance Fund$303
biBERK$393
Huckleberry Not final quote ($159 – $185)

This illustrates that workers comp insurance costs vary by providers. Be sure to shop around to compare several quotes before making your final decision.

>>MORE: How Much does Workers’ Compensation Insurance Cost?

How to Find Cheap Workers Compensation Insurance in California?

California is in the top 3 states with the most expensive workers compensation insurance. It can be a significant expense to your business, that is legally required. Finding the cheapest workers comp insurance for your business in California is important to keep the operating costs of your business low. Make sure you follow the tips below to find the cheapest workers comp insurance for your company in California.

Always compare several quotes:

Make sure you shop around with a few insurance companies or a digital broker to compare several quotes to get the cheapest workers compensation insurance quote for your business

State programs:

Check if there is any state savings program offered by California that your business can be qualified for.

Group insurance:

If your company is a member of a larger association in California, you may be able to get a group rate on your company’s workers compensation insurance. 

Identify potential hazards and fix them.

Once you fix them, make sure you notify your insurance agent (if you have one) or report it to your company. Continue improving the safety standard in your company’s workplace and ask for annual reviews when you renew your company’s workers comp insurance policy.

Invest in safety education.

According to Safety and Health, for every dollar you spend on injury prevention, you’ll earn a ROI of between $2 and $6 dollars. If you’re wondering how to start a safety program, OSHA (Occupational Safety and Health Administration) is a good place to start. After having the safety program in place, you may want to ask your agent to review the workers compensation insurance quote for your company if you are qualified for any discount.

Consider drug testing.

It should come as no surprise that workers who show up under the influence of drugs or alcohol are more likely to injure themselves or others. Consider to conduct regular drug testing programs for your employees and provide relevant training and incentive programs for your employees to show up at work completely sober.

Check classification levels.

Every employee type is assigned a classification level, and each level is assigned a rate that reflects the level of risk this type of job has. Obviously, a secretary is exposed to much less risk than a construction worker, even if they work at the same company. Make sure everyone is classified accurately and regularly update this as you are hiring new employees.

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

Who is exempt from workers comp insurance in California?

California is one of the strictest workers’ comp states. It only allows two exemptions to getting the coverage:

  • Sole proprietors who decide they don’t want it
  • Employers who are allowed to self-insure.

Self-insured workers compensation insurance in California

California has the largest number of employers currently in the self-insured program. As of Jan 2021, more than 7,000 California employers are self-insured workers comp insurance, both in private and public sectors.

Employers who want to self-insure their workers comp insurance liabilities have to apply with the Office of Self-Insurance Plans (OSIP) for approval. New private employer applications usually takes 21 days from application submission to self-insured certificate of insurance issuance. The self-insurance application is evaluated on a couple of dimensions: financial strength, proposed delivery of benefits, and suitability for the self-insurance program.

Employers in the workers comp self-insurance program are required to meet annual obligations from the state.

Learn more about the California self-insured workers compensation insurance program.

Workers comp insurance in San Diego, CA

Workers com insurance is required in San Diego, CA, the same as in the rest of California. Small businesses employ 59% San Diego workforce, about 697,000 employees. The median salary of San Diego workers is $80K and major industries are defense, tourism, and technology. These small businesses are required to have workers comp insurance for their employees.

If you are looking for affordable workers comp insurance in San Diego, consider the 6 companies we recommend above.

Workers comp insurance in San Francisco, CA

Similar to their counterparts in San Diego, small businesses in San Francisco, CA are required to have workers comp insurance. Small businesses in San Francisco should expect to pay a bit higher than those in San Diego because the median employees’ salary is San Francisco is $103K, more than 25% higher than that in San Diego. Workers comp insurance cost depends on employees’ payroll. Without higher payroll, small businesses should expect to pay more for their workers comp insurance coverage.

To find cheap workers comp insurance for your small business in San Francisco, be sure to compare several quotes from the companies that we recommend above to find the cheapest one for your company.

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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1 Comment

  1. Very Informative post. Thanks for sharing your knowledge with us.


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