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Sole proprietors can exclude themselves from workers' compensation in California.  By excluding yourself, you don't have to pay the rate per hundred for your payroll as the owner.
Consider the cost vs benefits before automatically excluding yourself though:

  • Workers' Comp pays up to 2/3 of your normal salary
  • Pays medical bills for on the job injuries
  • Lost wages
  • Physical therapy, out-patient care
  • Re-training if you need to go into another field

For some owners who are strictly doing clerical work or computer programming, the workers' comp rate may be under $1 per hundred dollars of payroll.  For example, $100,000 of payroll would only cost you $1,000/year.  That seems like a good deal if your were hurt while on-the-job.

Even if you don't have employees, workers comp could be good for your company just in case a 1099 independent contractor claimed injury against your company.  At the time of the claim, the work comp bureau or state employment agency would decide if that person qualified as an employee.  If the 1099 contractor qualifies as an employee, your business would get fined and you could be responsible for medical bills, lost wages, etc.

Talk to your local independent agent to get more information on how you can better protect your business and personal assets.

*This article only pertains to workers' compensation in CA. Other states have different rules and you should contact an independent agent if you have specific questions

Written by Joe Erle

Administrator on Jan 10, 2013 in Local News
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