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Workers Compensation
Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expense incurred due to a job-related injury.
Q. Do I need to have workers' compensation insurance?
A. California law requires employers to have workers' compensation insurance. Even out-of-state employers may need workers' compensation coverage if an employee is regularly employed in California or a contract of employment is entered into here.
Q. This is a family business and I’d like to pay the doctor cash. Is that OK?
A. No, it is illegal for an employer to pay medical bills directly. You must file a claim form (DWC form 1) with your claims administrator for all injuries that require more than first aid.
Q. Can I be fined for not carrying workers' compensation insurance?
A. Yes. If the Division of Labor Standards Enforcement (State Labor Commissioner) determines that an employer has failed to secure workers' compensation coverage, a stop order will be issued and served (Labor Code Section 3710.1). This order prohibits the use of employee labor until the coverage is obtained, and failure to observe it is a misdemeanor punishable by imprisonment in the county jail for up to 60 days or by a fine of up to $10,000, or both. (Labor Code Section 3710.2). The Division of Labor Standards Enforcement will also assess a penalty of $1,000 per employee employed at the time the stop order is issued and served. (Labor Code section 3722(a)). In addition, if an injured worker files a workers' compensation claim that goes before the WCAB, and the workers' compensation judge finds that the employer had not secured insurance as required by law, then, when the adjudication becomes final, the uninsured employer may be assessed a penalty of $10,000 per employee employed at the time of injury if the worker's case was found to be compensable, or $2,000 per employee employed at the time of injury if the worker's case was noncompensable, up to a maximum of $100,000 [Labor Code section 3722(b)]. Finally, as noted in a previous question, failure to secure workers' compensation insurance when you knew, or reasonably should have known, that it is required, is a misdemeanor "punishable by imprisonment in the county jail for up to one year, or by a fine of up to ten thousand dollars ($10,000) or by both that imprisonment and fine." (Labor Code Section 3700.5)
Q. Can my employees contribute for workers' compensation insurance?
A. No. Workers' compensation insurance is part of the cost of doing business. An employer cannot ask employees to help pay for the insurance premium.
Q. My spouse and I are the sole owners of our business. We have no employees. Are we required to obtain workers' compensation coverage?
A. Generally, if you are the sole owners of the business, coverage for yourselves, is optional if you wish to pursue it. You would need to have workers' compensation coverage for any employees you may hire. You should consult with your attorney, insurance agent or broker, or carrier regarding the specifics of you situation and your options.
Q. How much does workers' compensation insurance cost?
A. Workers' compensation insurance premium rates were deregulated several years ago. They may now vary from carrier to carrier. Like any good consumer, you should shop around for a carrier that best meets your needs. Cost is one consideration, but there are other factors you should look at: the services they provide, how convenient will it be to work with them how familiar they are with your industry, etc. If you have a broker or agent, check with that person.
Q. Is workers' compensation the same as State Disability?
A. No. Workers' compensation is only for injuries or illnesses that occur due to employment. State Disability is for injuries or illnesses that are not work related and is handled by the Employment Development Department.
Q. Can you insure my business in another state, or are you limited to California?
A. All Insurance Marketing has focused its efforts over the years to building relationships with insurance companies and other resources in California. It is in California where we are able to get you the best prices and provide the best services. If you have a business based in California, with branch offices out of state, we can help you. But if your company is entirely outside of California, or with only incidental branch offices in this state, we recommend that you find a local broker.
General Liability
A Brief Explanation of Some Common Insurance Terms regarding General Liability
General Aggregate - This is the limit the insurance company will pay on your behalf for any number of claims during the policy period. The most they will pay on one loss cannot exceed the Occurrence Limit.
Products & Completed Operations - The limit of this coverage is the amount the insurance Company is obligated to pay on your behalf based on policy coverage. This coverage extends protection to you during manufacturing or contracting operations. An example would be if you installed something incorrectly and caused damage.
Owners & Contractors Protective - if you have this coverage option you can be protected against liability for actions of other independent contractors and subcontractors Including liability due to your failure in supervising the contractor's work.
Personal & Advertising Injury - This coverage affords protection against claims such libel, slander, defamation of character or invasion of privacy (personal Injury) and claims alleging written or publicized offenses of the above examples.
Each Occurrence - The total amount shown as a limit of this coverage establishes how much the insurance company is obligated to pay on your behalf for each incident which leads to a claim made to the company under the terms of your policy.
Errors & Omissions Insurance
Why You Need Errors & Omissions Insurance
Regardless of what kind of business you own, customers can claim that something you did on their behalf was done incorrectly, and that this error cost them money or caused them harm in some way.
What Errors & Omissions Insurance Is
In the litigious world we live in today, many business owners protect themselves with errors and omissions insurance (E&O). This type of insurance may be appropriate for anyone who gives advice, makes educated recommendations, designs solutions or represents the needs of others, such as teachers, consultants, software developers, ad copywriters, Web page designers, placement services, telecommunication carriers or inspectors.
How Errors & Omissions Insurance Works
Although formalizing a contract with your clients can help limit your liability, the big expense in an errors and omissions claim is the legal defense needed to prove liability or innocence. Errors & Omissions policies are designed to cover many of these defense costs and ultimately the final judgment if the business owner does not win the case.
Umbrella Insurance
Why You Need Umbrella Insurance
No one really expects a disaster to strike his or her business. But every small business is vulnerable to a major catastrophe or a huge lawsuit. Think about some of the devastating losses you've heard about recently. Or the large settlements that are awarded in courts these days. Some of these losses could exceed your primary insurance coverage…unless you protect your business with umbrella insurance.
What Umbrella Insurance Is
As its name implies, umbrella insurance extends your coverage beyond the limits of your basic business insurance. Umbrella insurance is important because it covers unsuspected events. It's not expensive and in certain instances, it could literally save your business.
How Umbrella Insurance Works
Umbrella insurance policies provide additional liability insurance coverage after the limits of your underlying policy are reached.
For example, if several people were injured on your property and required $1.5 million in medical treatment but the liability limit of your underlying policy is $1 million, your umbrella insurance policy would cover the additional $500,000 (if you're found liable).
Cost of Medical Treatment $1,500,000
Your Basic Liability Limit $1,000,000
Umbrella Policy Would Cover the Gap $500,000
