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Overview of California Workers' Compensation

What is workers' compensation insurance and what is its purpose?

A workers' compensation insurance policy provides covered employees with medical and wage replacement (indemnity) benefits that arise from workplace injuries. Only workplace injuries that arise out of and in the normal course of business are compensable.

Generally, all businesses in California that have employees must purchase a workers' compensation insurance policy from a private insurance company or the State Compensation Insurance Fund.

Some large businesses are self-insured and do not purchase insurance policies from an insurance company.

For information concerning self insurance, see the Department of Industrial Relations, Office of Self Insurance Plans at http://www.dir.ca.gov/OSIP/.

Who must have a workers' compensation insurance policy?

Generally, all California businesses that have employees must purchase a workers' compensation insurance policy or be legally self-insured.

The WCIRB does not determine who is required to purchase a workers' compensation insurance policy nor does the WCIRB determine whether or not a person is an employee or an independent contractor.

For more information, visit the Department of Industrial Relations Division of Workers' Compensation website at http://www.dir.ca.gov/dwc/

What is covered by a policy?

A workers' compensation insurance policy covers the costs of medical treatment including physician visits, prescription medications, surgeries, etc. In addition, workers' compensation insurance provides lost time or indemnity benefits. The amount of indemnity benefits is based upon a worker's weekly wage and the benefit amounts are determined by California laws.