Are My Employees Covered?

Regardless of whether insurance is required in your state and regardless of how few employees you have, if an employee protected by the state statute is injured or killed in the course of working for you, you may be legally liable. One claim for a serious employee injury could bankrupt many small businesses. Insurance, through the payment of premiums for workers comp coverage, provides a predictable cost for handling this risk.

What Do I Do If An Employee Gets Injured Or Sick On The Job?

You must:

  • Provide a workers’ compensation claim form to them within one working day after the work-related injury or illness is reported
  • Return a copy of the completed form to the employee within one working day of receipt
  • If your employees are covered by a Medical Provider Network (MPN), make sure the injured worker is provided with a complete MPN employee notification and that an initial medical evaluation is arranged with an MPN physician
  • Forward the claim form, along with your report of occupational injury or illness, to the claims administrator within one working day of receipt
  • Within one working day of receiving the employee’s claim, authorize up to $10,000 in appropriate medical treatment
  • Provide transitional work (light duty) whenever appropriate
  • If the employee is the victim of a crime that happened at work, you must give notice of workers’ compensation eligibility within one working day of the crime.

Who Needs Workers Comp Insurance?

All California employers must provide workers’ compensation benefits to their employees under California Labor Code Section 3700. If a business employs one or more employees, then it must satisfy the requirement of the law.

Sometimes a business owner (sole proprietor) may desire to purchase workers’ compensation insurance to cover himself/herself only. The inclusion of a sole proprietor must be clearly stated in the workers’ compensation policy or must be added as a coverage endorsement to the policy. Since workers’ compensation insurance is a type of liability insurance where the employer assumes complete liability for all worker injuries, a workers’ compensation policy for a sole proprietor may not be the best choice.

Is Workers Comp Required In California?

Yes. California employers are required by law to have workers' compensation insurance, even if they have only one employee. And, if your employees get hurt or sick because of work, you are required to pay for workers' compensation benefits. Workers' comp insurance provides basic benefits, including medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits and a return-to-work supplement, and death benefits.

Can Employees Sue Employers Due To Work Injuries Or Illness?

The workers compensation system was adopted to provide injured workers and their dependents timely compensation regardless of who was at fault for a workplace accident. As part of the compromise that made the employer liable for work-related injury and disease costs regardless of fault, employees surrendered the right to sue the employer for injuries. For the most part, the system works as intended. Injured workers accept workers comp payments and do not sue. This is why workers comp is referred to as the employee’s “exclusive remedy.”

Nevertheless, there are certainly instances where “exclusive remedy” may not apply and injured workers may sue their employers. Conditions under which such suits are lawful vary among the states. In Florida, for example, injured employees may sue their employers in the following situations:

  • The employer commits an intentional and deliberate harmful act or engages in conduct that is certain to result in injury or death
  • An employee sexually harasses another employee
  • The employer violates the law prohibiting the firing, coercing or intimidating of an employee due to a workers comp claim
  • The employer has violated federal law regarding housing and transportation of migrant workers
  • The injury is excluded from coverage by workers compensation (such as a claim for psychological stress injury without any physical injury, a type of claim that is not compensable by workers comp in Florida)

Are My Employees Covered If Drugs And/Or Alcohol Were Involved?

States can impose drug and alcohol testing on the injured employee, and can deny the employee workers' compensation benefits if such tests show the employee was under the influence at the time of the injury.

Which Injuries Aren’t Covered By Workers Comp?

Workers' compensation insurance is designed to cover injuries that result from employees' or employers' carelessness. The range of injuries and situations covered is broad, but there are limits. States can impose drug and alcohol testing on the injured employee, and can deny the employee workers' compensation benefits if such tests show the employee was under the influence at the time of the injury.

Compensation may also be denied if the injuries were self-inflicted; where the employee was violating a law or company policy; and where the employee was not on the job at the time of the injury.

Does Workers Comp Cover Employees While Traveling On Business?

Your workers comp policy covers claims made only in the states named in the policy "Declarations." If an employee is injured while working in another state, and that state has benefits more generous than the state(s) named in your policy, the employee could file a workers comp claim in the other state and it would not be covered by your policy.

The solution is in the "Other States" section of the policy, which allows you to list states where employees might work from time to time so there will be coverage for claims filed in those states.

The "Other States" portion of the policy cannot be used to cover claims in states where coverage must be obtained from the state workers compensation fund.

"Other States" coverage is intended to provide protection only for incidental exposures in states where the employer does not operate as of the effective date of the policy. If you set up an operating entity in another state, notify your insurer, as this state should be added to the "Declarations" page of the policy.

Can my employees help pay for my workers' compensation insurance?

No. Workers' compensation insurance is part of your cost of doing business. An employer cannot ask employees to help pay the insurance premium.

Can my injured employee work while he or she is recovering?

Soon after the injury, the employee’s treating doctor will examine him or her and send a report to the claims administrator regarding the injured employee’s medical condition. If the treating doctor says the injured employee is able to work, the doctor should describe:

  • Clear and specific limits, if any, on the employee’s job tasks while recovering. These are called work restrictions. They are intended to protect your employee from further injury (example: no work that requires repetitive bending or stooping);
  • Changes needed, if any, in the employee’s schedule, assignments, equipment or other working conditions while recovering (example: provide headset to avoid awkward positions of the head and neck);
  • If the treating doctor reports that the employee cannot work at all while recovering, the employee cannot be required to work.

What happens if I’m uninsured and an employee is injured?

Failing to have workers' compensation coverage is a criminal offense. Section 3700.5 of the California Labor Code makes it a misdemeanor punishable by either a fine of not less than $10,000 or imprisonment in the county jail for up to one year, or both. Additionally, the state issues penalties of up to $100,000 against illegally uninsured employers.

If an employee gets hurt or sick because of work and you are not insured, you are responsible for paying all bills related to the injury or illness. Workers’ compensation benefits are only the exclusive remedy for injuries suffered on the job when you are properly insured. If you are illegally uninsured and an employee gets sick or hurt because of work, that employee can file a civil action against you in addition to filing a workers’ compensation claim.

What Is A “Permanent Disability”?

Permanent disability ratings are used to assess the degree of damage that resulted from an employee’s work-related injury or occupational disease. A permanent disability rating, sometimes known as a permanent impairment rating, is an assessment of the severity of their permanent impairment.

A permanent disability rating is important in calculating the amount of monetary compensation an employee is owed to compensate them for the permanent impairment related to a workplace injury or illness.