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Worker's CompensationWho is required to purchase workers' compensation insurance?
California employers are required under Labor Code Section 3700 to provide workers' compensation benefits to their employees. Failure to do so is a misdemeanor which is punishable by imprisonment and/or by fine.
However, workers' compensation coverage may not be required for some, such as sole business owners, business partners, and corporate officers. These exceptions should be reviewed on a case by case basis.
What are the benefits available to injured workers?
In California, the workers' comp benefits available to injured workers include:
What is the experience modification factor used for?
A workers' compensation experience mod is used in the process ofexperience rating. Experience rating increases or reduces the premium in a policy period based on the employer's loss experience in prior policy periods. The experience mod is unique to each employer and is calculated by comparing the employer's loss experience in a classification to the average industry experience in the same classification.
An employer qualifies for experience rating when its manual premium exceeds a certain threshold, which is approximately $20,000 in California. This threshold is determined by the Workers Compensation Insurance Rating Bureau and changes every year.
How is my workers' compensation premium calculated?
An employer's pre-tax workers' comp premium is typically calculated as follows:
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