By California law, employers are required to maintain worker’s compensation insurance. Failure to do so exposes the employer to significant fines and penalties. The Bureau of Labor Standards Enforcement monitors and enforces employer’s compliance with worker’s compensation laws. This agency employs field enforcement agents who look for employers that have employees but fail to carry worker’s compensation insurance. When an agent catches an employer who is at fault, it can be devastating for the business.
If your business falls into a category that calls for high worker’s compensation insurance premiums, you should shop carefully. One of the biggest mistakes an employer can make is to assume that State Compensation Insurance Fund (State Fund), the State of California’s program, always offers the lowest rates. For example, Farmers Insurance is typically considerably lower than State Funds’ rates for industries like auto repair, many types of construction subcontractors and restaurants, to name a few.
Typically, an employee files a claim due to physical injury or stress. Once filing the claim, the employee receives payment in lieu of the wages he or she would have earned on the job. The employee also does not have to pay for medical expenses. Frequent claims, therefore, are costly to the insurance carrier and can significantly increase employer’s rates.
Therefore, it is important to do everything you can to prevent claims. An insurance agent who is diligent and understands how to prevent injuries and stress-related claims on the job is essential. He should also be experienced with your type of business. Additionally, your agent should promise to periodically conduct safety inspections at your business’s location. This is done to uncover possible hazards that could lead to injuries. He should also provide advice on how to reduce stress in your workplace.
If you think you are paying more than you should for worker’s compensation insurance, you should contact a few agents that represent major carriers for quotes. If you do not have sufficient worker’s compensation coverage, you are at great risk. Don’t jeopardize the future of your business. Take action now.
Gregg L. Goodman, LUTCF is the CEO of the Gregg L. Goodman Insurance Agency, Inc. He is an agent for Farmers Insurance and provides life, health, homeowners and auto insurance, as well as commercial insurance programs. For more information, please call 661-254-6739.