How Workers Comp Insurance in California Works

Workers’ compensation insurance in California is a program designed to provide medical coverage, wage replacement, and other benefits to employees who are injured or become ill due to their job. 

This type of insurance is mandatory for all employers in California, regardless of the size of their business or the number of employees they have. 

Below is a detailed illustration of how comp insurance in California works.

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The Division of Workers’ Compensation

The California workers’ compensation system is administered by the Division of Workers’ Compensation, a part of the Department of Industrial Relations. The system is designed to provide temporary or permanent employees with fair and reasonable benefits while protecting employers from high costs associated with workplace injuries and illnesses. It is a criminal offense not to have a comp insurance plan in California. 

Types Of Workers’ Compensation Insurance in California

Employer’s Liability Insurance

This type of insurance is mandatory for all employers in California. It covers employers for workplace injuries or illnesses caused by the employer’s negligence. This coverage is in addition to workers’ compensation insurance and provides coverage for claims that exceed the limits of workers’ compensation insurance.

Workers’ Compensation Insurance

This is the most common type of workers’ compensation insurance in California. It covers medical expenses, lost wages, and other workplace injury or illness costs. Workers’ compensation insurance is mandatory for all employers in California, regardless of the number of employees.

Self-Insured Workers’ Compensation Insurance 

Some big employers in California choose to self-insure their workers’ compensation coverage. This means they assume the financial risk of providing coverage to their employees. Self-insured employers must meet certain financial requirements and obtain approval from the state to self-insure.

Occupational Accident Insurance 

This type of insurance is typically used by independent contractors or self-employed individuals not covered by traditional workers’ compensation insurance. Occupational accident insurance covers medical expenses and lost wages in the event of a workplace injury or illness.

Procedure For Obtaining Workers Compensation Benefits

Employees injured or become ill due to work-related conditions must report the incident to their employer as soon as possible. The employer is responsible for reporting the injury to their workers’ compensation insurance carrier. The carrier will then investigate the claim and determine whether the employee is eligible for benefits.

Employees who are deemed eligible will receive medical treatment for their injury or illness. The workers’ compensation insurance carrier typically pays for treatment, although there may be instances where the employee must pay a portion of the costs.

Other Benefits of Comp Insurance in California

In addition to medical benefits, workers’ compensation insurance in California also provides wage replacement benefits for employees who cannot work due to their injury or illness. The amount of wage replacement benefits is determined by the employee’s average weekly wage before the injury and is subject to certain limits. 

Employees who cannot return to work due to injury or illness may also be eligible for vocational rehabilitation services or retraining. These services are designed to help employees return to a new job suitable for their abilities.

Workers’ compensation insurance in California also provides death benefits for the dependents of employees who lose their lives to work-related injuries or illnesses. These benefits include a burial allowance and ongoing payments to dependents to help cover living expenses.


Workers’ compensation insurance in California is a vital program that provides critical benefits to injured or ill employees due to work-related conditions. By requiring employers to carry this insurance, the state helps ensure injured workers receive the care and support they need while protecting businesses from high workplace injuries and illness costs.

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