If you are a business owner, you have many factors to look at. Finding affordable general insurance is one of your top priorities.
Every business owner understands the importance of reducing exposure. Coverage is one way in doing that.
This is true regardless, if your business is located in Riverside CA or Fullerton CA.
This type of of protection comes in the form of Workers Compensation.
General Insurance – Workers Comp’s Function
It’s important to understand the back end function of a general insurance policy.
It’s functions and purpose to you as a business owner or a business representative is huge.
This is because Workers Compensation Coverage varies per state. With that said, each state has employers responsibilities and duties in the event of a claim.
These duties ensure that you handle the process in the right way.
This also prevents you from incurring further damage or loss.
Before comparing quotes online, make sure you understand why you need it first.
So let’s begin with what Workers Compensation truly is.
California Compensation – State Comparison
Every state in the union requires that employers pay for on the job injuries.
Under workers compensation law, employers are strictly responsible for the costs of any employee injured at their place of employment, regardless of fault.
Employers, make sure to take note of this information.
Unlike your car insurance policy, fault does not matter and does not effect the outcome of your claim.
It is the employers responsibility to take care of their employees injuries at work.
New Coverage Concept
Workers compensation coverage is relatively a new concept.
It is actually a concept that originated during the industrial revolution in Europe.
The state of Wisconsin passed the first successful U.S. Workers Compensation Law in 1911.
Afterwards, the United States has been building onto this concept ever since with a drastic new approach to the system compared to its original function.
In the Beginning
In the beginning of this period, the only recourse available to workers who were injured on the job.
Also, to seek damages under a system of common law or case-law, which is the liability portion of the law.
That system obviously favored employers and made it very difficult for an injured worker to obtain an award.
You can see how invaluable the implementation of the workers compensation system has been on our economy and social progression in our new age.
Courts eventually recognized that an employer did have certain obligations to employees.
To satisfy these obligations, the employer was expected to provide the following in order to comply to the new regulations surrounding workers compensation.
Employers must provide a safe place for their employees to work.
Safe equipment and tools must be provided to the employees from the employer.
Reasonably competent fellow servants.
Enforcement of safety rules. Advance and reasonable warnings about job dangers.
If you are an employer and violate any of the above obligations, then there might be a basis for establishing negligence.
This is because under the new system in which the Workers Comp operates, it’s the employers’ responsibility to their employee’s safety.
Burden of Proof
However, the burden of proof still falls fully on the injured employee.
More significantly, an employer, even if negligent, could invoke certain legal defenses.
Court decisions had created three basic defenses.
This could relieve an employer of legal liability which are as followed:
- fellow servant rule,
- contributory negligence,
- and assumption of risk.
Worker Compensation Insurance Laws
The arrival of these laws drastically altered the legal relationship between the employer and the employee.
In the past as you have read above, each party must prove the negligence of the other in order to secure or avoid payment.
Under the new laws, employers accepted liability for work related injury or death regardless of fault.
In most situations, employees no longer have to prove negligence and have given up their right to file suit, but they are now entitled to benefits.
Some classes of employees are exempt form the laws, and suits may still be filed for damages which are not covered by the compensation law.
In those cases which do fall outside the law, the three common law defenses are still available to the employers.
Statutory Law System
However, under today’s rules, a statutory or written law system, workers receive compensation for job related injuries without having to challenge an employer.
In this situation, it does not matter if the employer was at fault.
This coverage is automatic because it was created in with that concept in mind. It’s nothing like a personal auto insurance policy.
Statutory compensation benefits are the exclusive remedy for many types of work related injuries.
However, they guarantee that benefits will be paid and honored.
It took a major shift in social priorities and public policies to bring about the change.
California Compensation Coverage
The State Compensation Insurance Fund is administered by its board of directors.
This is for the purpose of transacting workers’ compensation in a competitive market with other workers compensation insurance companies.
It is also referred to as the SCIF and is run by 13 directors from the state of California.
The fund only writes worker’s compensation coverage.
However, this would be a last resort for a business after failing to obtain coverage from a private insurer.
The majority of the Fund’s business comes directly from employers, although some licensed brokers will also utilize the SCIF.
The early compensation laws applied only to very hazardous occupations.
Over the years however, the scope of the laws has expanded to embrace more and more occupational groups.
Every state has some exempt classifications, but it is estimated about 90 percent of the nation’s employees now fall under these laws.
Although the exemptions are not the same in all state, the following list of classes of employees are typically exempt:
Certain types of farm and agricultural workers
Charitable organization workers
Domestic employees and casual labor
In some states, the hours worked or wages earned determine whether or not an employee is exempt.
Employers are not required to provide insurance or compensation benefits for exempt employees. It is often recommended that they do.
The fact that a worker is outside the law does not preclude legal claims against the employer.
Benefits may always be voluntarily provided by purchasing worker compensation coverage to cover exempt employees.
Principals who use contractors, and contractors who sublet work to subcontractors, should secure certificates of coverage from the parties they work with.
Principals may be held labile for the employees of contractors who fail to meet obligations under the law.
This also includes proper coverage at the lower levels, the responsible party might have to provide benefits.
If an insurance company provides additional benefits, it may add the payroll of subcontractors when it calculates a final premium.
At this point, the principal or contractor might face a substantial and unexpected additional charge and face premium increase on their compensation policy.
Abuse of the System
On a final note, because and employer must provide these benefits and because the benefits are so liberal, the system is open for being abused.
Cottage industries have sprung up to service inured employees, some of whom use the injury as a means to an extended paid vacation.
Legions of unscrupulous lawyers, chiropractor, and doctor’s have made a living signing off on questionable claims and thus indirectly causing an increase in premium for the rest of us.
This page also known as the declaration page on most other types of coverage policies, lists the particulars of a specific policy.
Among the important parts of the information page are as followed.
Item 1 – will have your name and address, the type of business you manage, whether it be an individual, partnership or corporation. A space is provided to list any operations conducted at the location other than your policy address.
Item 2 – will show the policy period, which always begins at 12:01 A.M. standard time at the policy address.
Item 3 – this section will include space for listing all the states in which the workers compensation coverage will apply to.
Employers liability coverage limits are to be entered in item 3.B. The basic limits are $100,000, per accident for injuries, $100,000 per employee for disease, and $500,000 aggregate annually for disease. Higher limits may be purchased for an additional premium.
Item 3C. will have space for listing additional states in which you might have operations or business in. This safeguards against future exposures. The optional other state coverage will automatically begin only if the additional states are included in 3.C.
This space location will list job classifications and codes, estimated payrolls, rates, and estimated premiums that are provide under item 4. Premiums may be paid monthly, quarterly, semi-annually, or annually.
This information page will also have your name, the name of your carrier, the policy’s term, a list of covered states, the employers liability limits, classifications, schedules of rates, and advanced premiums.
This is a lot of information of course. But it is detailed nicely for your convenience on this page.
Once you understand the back end components of each coverage, the reviewing process of your information page will be quick and simple.
Other State Notation
Make special note of the other state option on this page.
This is mentioned several times because it is just that important. No other state protection will be covered unless the states are listed as seen on the bullet headers above.
Review, review, review is the best piece of advice when comparing rates and coverage options.
Make sure that your operations are not exposed if a certain box is not filled in properly.
Find the Cheapest Insurance Available in CA
If you should need any help shopping and comparing Workers Compensation Insurance in California, regardless if your business is located in Los Angeles, or Anaheim CA, give us a call at 800-962-0085.
We have been helping California business owners and industry leaders, find affordable workers compensation insurance quotes.
Finding affordable general insurance quotes should not be a difficult task. We can help with all your insurance and auto registration needs.
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