Workers’ Compensation Insurance California

Jump ahead to learn:

• Is Workers’ Compensation insurance California required for my business?
• How does Workers’ Compensation California work?
• How much does California Workers’ Compensation cost?
• What can Workers’ Comp California coverage include?
• Workers’ Compensation California business owners coverage
• Workers’ Compensation California FAQ
• How ERGO NEXT helps protect California business owners

Is Workers’ Compensation insurance California required for my business?

California workers’ compensation insurance is required for all businesses with at least one employee — full-time or part-time — under California Labor Code Section 3700. This applies regardless of business size, even if you only have one worker.

In addition, many clients, customers, landlords and partners may require proof of workers’ compensation coverage (called a certificate of insurance, or COI) before doing business with you.

Even if workers’ comp isn’t legally required for your California small business, many businesses could benefit from the financial protection of workers’ compensation insurance.

How does Workers’ Compensation California work?

If one of your employees suffers a work-related injury or illness, California workers’ compensation insurance can help get them the care and benefits they need. This type of business insurance also helps protect business owners from personal injury lawsuits that could be related to the incident.

Here’s how the process works in California, per the Division of Workers’ Compensation (DWC):

1. Report the injury. The employee must report the work-related injury or illness to their employer as soon as possible. And employers must provide the official DWC-1 claim form within one working day of learning about the injury.
2. Get medical care. The injured employee will be directed to an authorized treating physician. Employees generally receive treatment through providers authorized under California’s workers’ compensation system, although different rules may apply in emergencies or when a physician has been properly predesignated.
3. File the DWC-1 claim form. The employee completes their section of the DWC-1 form and returns it to the company owner. The business fills in their portion of the form and forwards it to their workers’ comp insurance company. A completed copy is then shared with the employee within 24 hours.
4. The insurer reviews the claim. The insurance carrier has 90 days to accept or deny the claim. During that time, up to $10,000 in medical treatment must be authorized. If the claim isn’t denied within 90 days, it’s presumed to be covered.
5. Benefits are paid. Depending on the outcome, the insurer coordinates payment for authorized medical treatment — including doctor’s visits, hospitalization, physical therapy and prescriptions — as well as a portion of lost wages if the employee can’t work.
6. The employee returns to work or receives ongoing benefits. When medically cleared, the employee returns to their role. If the injury results in a permanent impairment or prevents the employee from returning to work, ongoing disability or supplemental job displacement benefits may apply.

California workers’ compensation operates under a no-fault system: employees don’t need to prove their employer was at fault to receive benefits. And when an employee accepts workers’ comp benefits, they generally waive the right to sue their employer for negligence related to that workplace injury.

How much does California Workers’ Compensation cost?

Workers’ compensation costs vary across industries. Some factors that influence what you’ll pay include:

• Your number of employees and the type of work they do.
• Your total payroll.
• Your insurance claims history.
• The locations where you do business.

The best way to determine what you’ll pay for CA workers’ compensation for your business is to get a free instant quote from ERGO NEXT.

What can Workers’ Comp California coverage include?

Typically, CA workers’ compensation insurance includes coverage for:

• Medical treatment and medical care for job injuries.
• Weekly wages from lost income benefits.
• Retraining if employees can no longer do their job.
• Permanent disability benefits and temporary disability benefits.
• Death benefits and survivor benefits.

Workers’ compensation doesn’t usually cover incidents that aren’t job-related, or situations where the injured person violates company policies, commits misconduct or uses drugs or alcohol.

California Workers’ Comp insurance income benefits

California workers’ comp income benefits depend on the nature and severity of the injury:

• Temporary total disability (TTD): If a doctor confirms an employee can’t work at all, your employee will receive two-thirds of their average weekly wage, up to the state maximum benefit amount in effect on the date of injury. For 2026, the maximum TTD rate is $1,764.11 per week, but note that this number changes regularly. Benefits are generally capped at 104 weeks within five years of the injury date.
• Temporary partial disability (TPD): If your employee can return to work with restrictions at reduced wages, they may receive a portion of the difference between pre-injury and post-injury wages.
• Permanent disability (PD): If the injury results in a lasting impairment after the employee has reached maximum medical improvement (MMI), they will receive ongoing benefits based on disability rating. Permanent disability rates currently range from $160 to $290 per week depending on the disability percentage. But, again, these numbers change over time.
• Supplemental job displacement benefits: If the employee can’t return to their previous job, they may receive a $6,000 voucher for retraining or education.

CA Workers’ Compensation insurance death benefits

In the unfortunate situation that an employee dies after a covered accident or injury at work, workers’ compensation survivor’s benefits in California usually provide financial support to surviving members of the deceased’s immediate dependents.

California Workers’ Comp death benefits may also cover burial expenses up to $10,000 per the California DIR.

Workers’ Compensation California business owners coverage

Workers’ comp in California can help protect employees and business owners alike.

Business owners have the option to add owners coverage to their business policy to help protect themselves. This could be an asset  if they’re injured on the job to help with medical expenses not covered by personal insurance as well as lost wages while they recover.

How ERGO NEXT helps California small business owners

ERGO NEXT makes it fast, easy and affordable to protect your small business — and you can do it all online.

We’ll ask a few questions about your business and give you a quote. You can select your coverage options and buy your policy in about 10 minutes. Your certificate of insurance will be available immediately, and you can access your policy 24/7 via web or mobile app.

If you have questions, our licensed, U.S.-based insurance professionals are available to help.

Start a free quote with ERGO NEXT.

More resources for small business owners

• What to do when an employee is injured at work
• Does a sole proprietor need Workers’ Compensation insurance?
• How to file a Workers’ Comp claim
• What is a Workers’ Compensation audit?
• How Does a Workers’ Comp Claim Affect the Employer?
• Monopolistic states for Workers’ Compensation insurance
• What is a Workers’ Comp exemption?