What Is Workers Compensation Insurance?
Workers compensation insurance pays benefits to employees who are injured or become ill because of their job, including medical treatment, partial wage replacement, and disability and death benefits. In California, employers with one or more employees generally must secure it, usually through an insurance policy or state-approved self-insurance. In most cases, it is also the employee’s exclusive remedy against the employer for a work injury.
Oakview Insurance Services, Inc. writes workers compensation insurance for employers in Yuba City, Marysville, and the greater Yuba-Sutter region, across agriculture, construction, food service, healthcare, manufacturing, and retail.
As an independent agency, we compare workers compensation options from multiple insurers, including Zenith and the State Compensation Insurance Fund, based on your industry, payroll, and claims history. Call (530) 674-5054 or start a quote online.
Who Must Carry Workers Compensation in California?
California Labor Code Section 3700 requires employers with one or more employees to secure workers compensation benefits, usually through an insurance policy or state-approved self-insurance. That includes covered full-time, part-time, seasonal, and temporary employees. There are very few exceptions, and businesses that believe they are exempt often are not.
Sole Proprietors and Contractors
A sole proprietor with no employees is generally not required to carry workers compensation, but contractors are an important exception. C-39 roofing contractors and, since January 1, 2023, C-8, C-20, C-22, and C-61/D-49 contractors generally must maintain workers compensation insurance or approved self-insurance even without employees. Under current law, beginning January 1, 2028, the requirement extends to other active contractor licenses. Qualifying joint ventures with no employees have a statutory exemption. General contractors also commonly require proof of coverage from subcontractors before work begins.
Independent Contractors and AB5
A 1099 form does not by itself make someone an independent contractor. California generally applies the ABC test under AB5, and certain construction subcontracting relationships can instead be evaluated under the Borello test when specific statutory conditions are met. If a worker you treated as a contractor is found to be an employee after an injury, the workers comp obligation falls on you. Call us at (530) 674-5054 if you are unsure how your workers are classified.
Owners and Officers
Whether owners, partners, corporate officers, or LLC members are included or excluded depends on how the business is structured, and exclusions have specific requirements. We confirm who is covered when we set up the policy.
What Workers Compensation Covers
California workers compensation provides these benefits to employees for covered work injuries and illnesses:
- Medical treatment for work-related injuries and illnesses
- Temporary disability benefits that replace part of lost wages during recovery
- Permanent disability benefits if the injury causes lasting impairment
- A supplemental job displacement benefit, a voucher for retraining when eligible
- Death benefits for dependents if a work injury results in death
Most policies also include employers liability coverage. Workers compensation is generally an employee’s exclusive remedy against the employer, and employers liability can defend and pay for certain injury-related lawsuits that fall outside that rule, subject to its limits and exclusions.
Workers Compensation by Industry
Rates and exposures vary widely by industry. This table shows what drives claims in the industries we serve most often.
| Industry | Common injury exposures | What to watch |
|---|---|---|
| Agriculture and farm labor | Equipment, heat illness, pesticide exposure, repetitive motion | Seasonal payroll, H-2A workers, and limited carrier appetite. |
| Construction trades | Falls, struck-by injuries, strains, heavy equipment | Correct classifications, subcontractor certificates, and license requirements. |
| Restaurants and food service | Cuts, burns, slips, repetitive motion | Tipped and part-time payroll, delivery drivers. |
| Healthcare | Patient handling, needle sticks, infectious exposure, strain | Home health and clinical staff classifications. |
| Retail and hospitality | Slips and falls, stocking injuries, housekeeping strain | Seasonal hiring and multiple locations. |
| Manufacturing, warehouse, and ag processing | Machinery, forklifts, material handling, repetitive motion | Seasonal processing payroll and loss control. |
Agriculture and Farm Labor
Yuba and Sutter Counties are agricultural hubs, and farm labor workers compensation is one of the more specialized parts of the California market. Agricultural employers must cover all employees, including seasonal and H-2A workers. Farm labor is a specialized market, carrier appetite varies, and rates reflect the exposure. The State Compensation Insurance Fund is an important market for agricultural employers. See our State Fund page for more.
Contractors and Construction
Construction classifications such as roofing, framing, concrete, and excavation carry some of the higher workers compensation rates in California. We write workers compensation for contractor trades throughout the region. See our pages for plumbers, electricians, HVAC contractors, painters, and landscapers, or our contractor insurance page.
Penalties for Operating Without Workers Compensation
The short answer: Operating without required workers compensation in California is a crime, can bring a stop order that halts your use of employee labor, and triggers state penalty assessments. If an employee is hurt while you are uninsured, you can also be sued directly and required to repay benefits the state pays on your behalf.
| Consequence | What the law provides |
|---|---|
| Criminal charge | Failure to secure coverage is a misdemeanor under Labor Code Section 3700.5, punishable by up to one year in county jail, a fine of not less than $10,000, or both. |
| Stop order | The state can order you to stop using employee labor until coverage is in place, with a penalty of $1,500 per employee at the time the order is served. Violating a stop order is a separate misdemeanor. |
| Uninsured period penalty | For an uninsured period of more than a week, the greater of twice the premium you should have paid or $1,500 per employee employed during that period. |
| Uninsured injury claim | If an uninsured worker’s claim goes before the Workers’ Compensation Appeals Board and the employer is found to have failed to secure required coverage, additional penalties of $10,000 per employee on the payroll at the time of injury for a compensable case, or $2,000 per employee for a noncompensable case, up to $100,000. |
| Civil and reimbursement liability | An injured employee can sue an uninsured employer directly, and the state’s Uninsured Employers Benefits Trust Fund can pursue the employer for benefits it pays. |
Enforcement is handled by the Labor Commissioner’s office, part of the Department of Industrial Relations, which conducts inspections in industries such as construction, agriculture, and food service. A stop order prohibits the use of employee labor until the employer secures required coverage. Obtaining coverage does not eliminate penalties that were separately assessed. This summary is general information, not legal advice.
Premiums, Audits, and the Experience Mod
How Premiums Are Calculated
Workers compensation premium is based mainly on payroll in each job classification, the rate for that classification, and your experience modification. Classifications with higher injury costs, such as roofing and farm labor, carry higher rates than clerical work. Getting employees into the correct classifications is one of the most important parts of an accurate premium.
Payroll Audits
Because premium is based on estimated payroll, policies are audited after each policy term. If actual payroll comes in higher than the estimate, the audit produces an additional premium bill. If it comes in lower, you may receive a return premium. Seasonal employers should make sure peak-season payroll is reflected in the estimate.
What Is the Experience Mod?
The experience modification rate, often called the ex mod or X-mod, is a factor applied to the premium of eligible employers. It compares your actual claims history with what is expected for businesses of similar size in the same classifications. A mod of 1.00 is average, above 1.00 increases premium, and below 1.00 reduces it. If the premium subject to experience modification is $20,000, a 1.25 mod increases that portion to $25,000, while a 0.85 mod reduces it to $17,000. Other rating adjustments, charges, and minimum premiums can also affect the final bill.
In California, the Workers’ Compensation Insurance Rating Bureau calculates mods using three years of claims and payroll data, generally excluding the most recent year. Claim frequency often affects the mod more than a single larger claim, which is why many small claims can raise costs noticeably.
How Oakview Helps With Your Mod
We review experience rating worksheets for classification and claim reporting errors, explain which open claims are likely to affect future mods, and discuss return-to-work and safety practices that can reduce claim costs. If you have not reviewed your mod recently, call us at (530) 674-5054.
Workers Compensation Carriers We Work With
As an independent agency, we work with multiple workers compensation insurers. Two are especially relevant for Yuba-Sutter employers.
Zenith
Zenith is a private carrier focused on workers compensation that writes California employers in industries including agriculture and construction. Whether it is competitive for your business depends on your industry, payroll, and claims history. See our Zenith workers compensation page.
State Compensation Insurance Fund
The State Compensation Insurance Fund, known as State Fund, is a public enterprise fund created by the Legislature to provide an available workers compensation market for California employers. It is one of the state’s largest workers compensation insurers and is often an important option for agricultural employers, higher-risk contractors, and businesses that private carriers decline. See our State Fund page.
Serving Employers Throughout Yuba-Sutter
We write workers compensation for employers in Yuba City, Marysville, Live Oak, Olivehurst, Linda, Gridley, Wheatland, Plumas Lake, Chico, and throughout Yuba, Sutter, Butte, and Colusa Counties. That includes ZIP codes 95991, 95992, and 95993 in Yuba City, 95901 in Marysville and Linda, 95961 in Olivehurst and Plumas Lake, and 95953 in Live Oak.
Oakview is rated 4.9 stars, with 850+ five-star Google reviews. Read what clients say on Google or meet our team.
Workers Compensation FAQs
Is workers compensation insurance required in California?
Yes. California employers with one or more employees generally must secure workers compensation benefits, usually through an insurance policy or state-approved self-insurance. This includes covered part-time, seasonal, and temporary employees. Failing to do so is a misdemeanor and can bring a stop order and state penalty assessments.
What does workers compensation insurance cover in California?
It covers medical treatment for work-related injuries and illnesses, temporary and permanent disability benefits, a supplemental job displacement voucher for eligible injured workers, and death benefits for dependents. Most policies also include employers liability coverage for certain injury-related lawsuits that fall outside workers compensation’s exclusive remedy.
Do sole proprietors and contractors need workers compensation?
A sole proprietor with no employees generally does not, but contractors are an exception. C-39 roofing contractors and, since January 1, 2023, C-8, C-20, C-22, and C-61/D-49 contractors generally must maintain workers compensation insurance or approved self-insurance even without employees. Under current law, beginning January 1, 2028, the requirement extends to other active contractor licenses, except qualifying joint ventures with no employees.
How much does workers compensation insurance cost in California?
Cost depends mainly on payroll in each job classification, the rate for those classifications, and your experience mod. Higher-risk work such as roofing and farm labor carries higher rates than office work. Premium is estimated at the start of the policy and adjusted by audit after the term ends.
What is the experience modification rate and how does it affect my premium?
The experience mod is a factor applied to the premium of eligible employers that compares their claims history with what is expected for similar businesses. A mod of 1.00 is average, above 1.00 increases premium, and below 1.00 reduces it. We can review your experience rating worksheet for errors and explain what is likely to affect future mods.
Do agricultural employers need workers compensation in California?
Yes. Agricultural employers with one or more employees, including seasonal and H-2A workers, must carry workers compensation. Farm labor is a specialized market where carrier appetite varies, and the State Compensation Insurance Fund is an important option for many agricultural employers.
What is the State Compensation Insurance Fund?
The State Compensation Insurance Fund, known as State Fund, is a public enterprise fund created by the Legislature to provide an available workers compensation market for California employers. It is one of the state’s largest workers compensation insurers and often serves agricultural employers, higher-risk contractors, and businesses that private carriers decline.
What is the difference between Zenith and State Fund?
Zenith is a private carrier focused on workers compensation that writes California employers in industries including agriculture and construction. State Fund is a public enterprise fund that serves employers across industries, including some that private carriers decline. Which is more competitive depends on your industry, payroll, and claims history, and we can compare both along with other carriers.
How do I get a workers compensation quote in Yuba City?
Call (530) 674-5054 or complete our online quote form. We will ask about your industry, payroll by job type, number of employees, and claims history, then compare options across multiple carriers.
Talk to Oakview About Workers Compensation
Whether you are setting up coverage for your first employee, reviewing a high experience mod, or facing a large audit bill, we can help. Call (530) 674-5054, email info@oakviewins.com, or request a workers compensation quote online.