What it is
Workers compensation pays medical costs and lost wages for employees injured at work, and protects the employer from most injury lawsuits. California requires it from the first employee, including founders who are employees in many structures.
What it covers
- Medical costs for work injuries
- Lost wage replacement
- Employer liability defence for injury related suits
- Remote and hybrid work injuries, which are compensable in California
What it does not cover
- Independent contractors (misclassification is the risk, not the policy)
- Injuries outside the course of employment
- Intentional employer misconduct
What triggers buying it
- Hiring employee number one in California
- Adding employees in new states (each state has its own rules)
- Reclassifying contractors to employees
- Your first payroll audit adjustment, which good class coding helps avoid
Who requires it
California law. There is no contract negotiation here; operating without it risks stop work orders and personal liability.
Typical limits
Statutory benefits, with employer liability commonly at $1M.
Frequently asked questions
Do remote employees in other states count?
Yes. Each state where an employee works generally needs coverage for that state on the policy, and some states require buying from a state fund. We map this as you hire.
Why did our premium change at audit?
Workers comp is priced on estimated payroll and trued up at audit. Accurate class codes and payroll records keep the adjustment small.
Talk through your stack before you sign the next contract
Send us the term sheet, the customer MSA, or the renewal you are worried about. We will tell you plainly what it requires, what your current programme does about it, and what we would place differently.