Workers' Compensation Insurance — California

Q: How Do I Get Workers’ Compensation Insurance in California?

You can get workers’ compensation insurance in California through a private insurance company or the state workers’ compensation fund. Employers who fail to carry required coverage may face penalties under California law, including fines, imprisonment, state penalties, and a stop order that can prevent business operations until coverage is obtained.

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Key Takeaways

California requires workers' comp insurance for every employer with at least one full-time or part-time employee.
Benefits can include medical treatment, temporary and permanent disability payments, supplemental job displacement vouchers and death benefits.
Sole proprietors, fully owning executive officers and non-working LLC members may qualify for exemption.
Skipping required coverage can lead to a $10,000 fine, up to a year in prison and state penalties of up to $100,000.
The average cost of workers’ comp insurance in California is about $1,924 per year, or $160 per month, for The Hartford’s small business customers.**

What To Know About California Workers’ Compensation Insurance

When it comes to workers’ compensation insurance, California law requires employers to carry coverage. Workers’ compensation insurance, also known as workers’ comp, gives your employees benefits if they get a work-related injury or illness. These benefits include:¹

Medical treatment to help your employees recover and return to work, including physical therapy and ongoing care.
Temporary disability payments if workplace injuries prevent an employee from doing their usual job while recovering.
Permanent disability benefits if a doctor diagnoses an employee with an injury they can’t recover from. Depending on the injury or illness, some employees may be eligible for a life pension payment.
Supplemental job displacement vouchers that help pay retraining costs if an employee can return to work but can’t do their original job.
Death benefits for a worker’s family if they lose their life from a work-related injury or illness.

Workers’ comp can also help protect your California business. It typically includes employer’s liability insurance, which can help cover legal defense costs, settlements and judgments if an employee or their family sues your business over a workplace injury or illness.

How Does Workers’ Compensation Work in California?

Workers’ comp insurance in California can help your employees if they get a work-related injury or illness. While the goal is to have your employee return to work, if an injury or illness is severe enough, it can require retraining or additional benefit payments. Workers’ compensation benefits are based on an employee’s average weekly wage. The actual amount varies, depending on the type of benefit.²

small business employee protected by california workers compensation insurance

Is Workers' Compensation Insurance for California Businesses Mandatory?

California workers’ comp insurance is required for businesses with at least one part-time or full-time employee. The state defines an employee as a person working for a company, whether the arrangement is:³

Expressed or implied
Oral or written
For lawful or unlawful unemployment

Who Is Exempt From Workers’ Compensation Insurance in California?

There are certain people who fall under the workers’ compensation exemption in California, such as:

Sole proprietors who can elect to have coverage⁴
Executive officers and directors if they fully own the business⁵
LLC members who don’t work in the business

You also don’t need to include independent contractors under your workers’ compensation coverage. To help determine if a worker is an employee or independent contractor, you can use the ABC test explained in California Assembly Bill 5.

It’s important to understand California’s workers’ compensation insurance exemptions, so you don’t face fines or penalties if you’re required to have coverage.

California Workers’ Comp Insurance Laws

Make sure you understand the workers’ compensation requirements in California. There are three things your business must do to follow the law:⁶

Get workers’ compensation coverage for your business and employees.
Provide a workers’ compensation pamphlet or brochure to new hires.
Post a “Notice to Employees” poster in the workplace.

Your employees may ask you, “Who pays for workers’ compensation?” California prevents you from having your employees pay for or offset their workers’ compensation insurance cost. So, they won’t have a paycheck deduction for coverage like they would for health insurance or other benefits. In return, your employees generally can’t sue you if they get an injury or illness from work.

How Much Is Workers’ Compensation Insurance in California?

Workers’ compensation in California costs about $1,924 a year, or about $160 a month, on average with The Hartford.**

Your actual cost can vary based on several factors, including:

Location
Payroll
Industry
Claims history
Type of work

Higher-risk jobs typically cost more to insure than lower-risk roles. Workers’ comp premiums are often calculated per $100 of payroll, so businesses with larger teams or higher wages may pay more.

California Workers’ Comp Settlement Types

Workers’ compensation disputes can happen for many reasons. You may dispute whether an injury happened at work or an employee may have an issue with their workers’ compensation benefits.

Not all workers’ compensation claims get disputed or go to trial. If a case does go to trial, both parties may agree on a settlement beforehand. Depending on the circumstances, most employees can choose from two types of workers’ comp settlements:⁷

Stipulated Findings and Award

CA workers’ compensation insurance allows injured workers to choose a Stipulated Findings and Award settlement if they need future medical care because of a permanent disability. The employer pays for the ongoing medical treatments in this type of settlement.⁸

Compromise and Release

A Compromise and Release settlement means an injured worker agrees to accept a one-time payment. Accepting the lump sum resolves the workers’ compensation claim.⁹

California Workers’ Compensation Claims

When you get a report of an injury at work, there are specific steps you have to take to file a workers’ compensation claim in California. Employees generally have up to one year after the date of injury or illness to report and file a claim.

Within one business day after getting a report of injury, you must give your employee a workers’ compensation claim form. After they submit the form, you have one business day to:

Provide a completed copy of the claim form to your employee.
Forward the claim form and your employee’s report of injury or occupational illness to your insurer or claims administrator. If you’re one of our customers, you can file a workers’ compensation claim on our website.
Authorize up to $10,000 in appropriate medical treatment.
Depending on the situation, you may also need to authorize light-duty work for your employee.

Why Trust The Hartford for California Workers’ Compensation Insurance

For more than 200 years, The Hartford has helped small businesses protect what they’ve built. Our California workers’ compensation insurance is designed to help you support your employees after a workplace injury or illness — while making claims easier to manage.

Here’s what small business owners in California get with The Hartford:

Care and Support for Injured Employees

Employees have access to a nationwide network of over 1 million experienced providers, plus nurse case managers who help coordinate care and support recovery.

Convenient Prescription Coverage

Employees can fill prescriptions at thousands of pharmacies nationwide, often with little or no out-of-pocket costs.

Tools To Help You Manage Claims

Our digital platform, My Workers’ Comp Connection, helps keep you and your employees informed throughout the claims process.

Billing and Payment Flexibility

With payroll billing, your premium is based on your actual payroll, not an estimate, which can help make payments more accurate.

Whether you’re hiring your first employee or growing your team, our specialists can help you stay compliant with California workers’ comp laws while supporting your people when they need it most.

What California Business Owners Say About Workers’ Comp From The Hartford:

“The process of filing claims with The Hartford is seamless and super easy to do online. I also called and spoke with a representative who was very helpful and nice. I highly recommend The Hartford.”

Leslie from Glendora, California

“The folks at The Hartford have been a huge resource for us as a small company!”

Eli from Benicia, California

“Filing a claim can be stressful, yet my representative made the process easy and far less overwhelming. They kept me fully informed… I always knew where things stood throughout the process.”

Valerie from Truckee, California

“The claims personnel made the entire process from reporting to resolution very easy for the employer and the employee.”

Max from San Diego, California

“Fast and excellent! The agent was very patient and explained clearly.”

Faith from Placentia, California

“Claim experience was quick and easy. [A] representative called for more information within a few hours of filing [the] claim.”

Alana from Folsom, California

small business employee protected by California workers comp insurance

Get a Quote for Workers’ Compensation Insurance in CA

Business owners have trusted us to protect their business for over 200 years. Whether you need help getting workers’ compensation coverage or filing a claim, we’re here for you. Get a free workers’ comp quote to see your price and explore coverage options.

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Frequently Asked Questions About Workers’ Compensation Insurance in California

Is Workers’ Compensation Insurance Required in California?

Yes, workers’ compensation insurance is required in California for most employers who have at least one employee. This includes full-time and part-time workers.

To follow state law, California businesses must carry workers’ comp coverage through a licensed insurance company or qualify for self-insurance. Requirements can vary based on your business structure, so it’s important to confirm what applies to your situation.

How Do I Get Workers’ Compensation Insurance in California?

If you need workers’ compensation insurance in California, you can buy coverage from private insurance companies or the state fund for workers’ compensation. If you don’t have coverage, you’re violating California Labor Code. Failing to carry required coverage is a criminal offense, and you could face a:

$10,000 fine
One-year prison sentence
State penalty of up to $100,000¹⁰

The state may also issue a stop order that prevents you from operating until you become properly insured.

Professional Liability Insurance in California

How To Get Workers’ Comp Insurance

Workers’ Compensation FAQs

** Costs, premiums, and coverages mentioned are estimates and are not guaranteed. Actual cost, premium, and coverage are determined at the time of quote or issue and are specific to an individual risk. Premiums are based on information provided to The Hartford, including, but not limited to, underwriting and rating criteria. All examples included on this website or in an advertisement are intended for informational purposes only and are not an offer or a guarantee of premium or coverage. Coverage and products described are subject to the terms and conditions found in the policy contract. Any educational information provided about available coverages does not modify the policy language or imply that any claim is covered. Products are not available in all states or for all businesses.

^1,4,5,6,10 State of California Department of Industrial Relations, “Answers to Frequently Asked Questions About Workers’ Compensation for Employees,” viewed June 2026.

² State of California Department of Industrial Relations, “Workers’ Compensation Benefits,” viewed June 2026.

³ Justia Law, “California Labor Code 3551,” viewed June 2026.

^7,8,9 State of California Department of Industrial Relations, “Division of Workers’ Compensation: Permanent Disability Rating Determination,” viewed June 2026.

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Workers’ Compensation Insurance — California