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Every employer, including self-employed individuals, needs to look at the requirements of workers’ compensation in the state of California. If you only employ one other person, then you have to carry insurance. If you work in certain hazardous occupations, you may need to take the insurance on yourself.
In the state of California, workers’ compensation insurance is optional for most self-employed workers. If you are a roofer or a self-employed individual in other highly hazardous fields, you may need to obtain a workers’ compensation policy for your own injuries. The provision is outlined under Business and Professions Code Section 7125. California does have a threshold for self-insurance, but the minimum net worth is high at $5 million, with an annual income of $500,000 and a state security deposit.
Furthermore, anyone who is responsible for carrying workers’ compensation as a self-employed individual needs to carry and present proof of insurance to customers if asked. Those who fail to take the appropriate actions could have their licenses revoked and face criminal prosecution. If you have a C-39 license, you need to obtain workers’ compensation insurance.
If you’re not sure if you are required to carry workers’ compensation, contact the California Department of Industrial Relations, or a workers’ compensation attorney who can better explain your rights and responsibilities as a self-employed individual under state laws. Since repercussions for failing to carry insurance can be costly and career-damaging, we highly recommend clarifying your responsibilities early on.
If you do not qualify for self-insurance, you will need to use a licensed insurer who has the proper authorization to develop California workers’ compensation policies. You can use the California Department of Insurance site to find a broker or agent authorized to write your policy. You may want to secure quotes from several different agents to find the best rate for a self-employed worker. You can also use the State Compensation Insurance Fund website to find a policy if you have trouble locating a larger company that insures self-employed workers.
Although you may think of the requirement as a hassle and a drain on your monthly budget, the insurance will act as a safety net if you do suffer an injury on the job. If you suffer a catastrophic injury in a fall or experience some kind of debilitating illness as a result of the work you do, your insurance policy will provide the extended disability coverage you need to get back on your feet. The financial support can significantly help you after a serious injury on the job.
While self-employed workers aren’t subject to the same employer coverage problem W-2 employees face, they may still face trouble having a claim honored after an accident. Larger insurance companies will often do anything they can to maximize their profit while minimizing the payouts to policyholders. As a result, you could end up not receiving your rightful compensation, regardless of the premium you pay every month.
If you hold the proper insurance required by the state and have to use it, you deserve to obtain fair compensation according to your policy. You can dispute the claim findings with your representative, but if that doesn’t work, secure the services of an experienced workers’ compensation attorney. A workers’ compensation attorney can help you hold an insurance company liable for their bad faith practices and obtain the compensation you need to move on.