Workers’ Compensation Insurance
California requires workers’ comp from your first employee. Here’s what it pays for, how payroll sets the price and what to send for a quote.
California’s rule: one employee means coverage
California makes workers’ compensation mandatory once a business has a single employee, part-time staff and relatives on the payroll included. The policy pays medical care and part of lost wages for job injuries and illnesses, and in exchange an injured employee generally cannot sue the employer over the injury. Sole owners with no employees, and partners or LLC members who are not on the payroll, sit outside the rule, although contractors holding a C-8 concrete, C-20 HVAC, C-22 asbestos abatement, C-39 roofing or D-49 tree service license must carry it anyway, and from January 1, 2028 the requirement reaches every CSLB licensee. Insurers price the policy per $100 of payroll in each job class, then adjust it for your own claims record through an experience modification.
Information that helps us get started
- The type of work your employees perform.
- The states where your employees work.
- Your employee count and estimated payroll.
- Your current coverage and renewal date, if applicable.
You do not need to share employee medical records or Social Security numbers through our website inquiry form.
Trades with their own workers’ comp rules
Construction trades pay some of the highest rates, and their payroll splits into classes by task and wage. Our pages for plumbers, electricians, HVAC contractors and painters show how each trade is classified and what the CSLB asks of license holders. Injuries to customers and visitors are a separate policy, general liability.
When you are ready, send us your payroll by role and we will compare workers’ comp options with you.
California employer guides and claims that are not injuries
The California workers’ comp basics for employers guide explains class codes, payroll audits and how an experience modification follows your claims history. Before treating anyone as a contractor rather than staff, read employees vs. independent contractors in California, because a worker paid as a contractor can still be counted as an employee when the policy is audited.
Workers’ comp is not built for a claim that an employee was harassed, passed over for promotion or fired unfairly. Those allegations are the subject of employment practices liability insurance, a separate policy many employers raise once they have a handful of staff, a supervisor or written personnel policies.
How much does workers’ comp insurance cost in California?
As of 2026, published premium data from national small-business insurers shows workers’ comp starting under $300 a year, with a typical California figure around $63 a month, about $750 a year. That median reflects very small employers with a handful of staff and modest payroll, many of them in office-type work. Established employers with field crews, larger payroll or physically demanding jobs commonly pay well above it, up to more than $5,000 a year. Every number here is published industry data, not a Mithril1 quote.
California prices this coverage per $100 of payroll, with a separate rate for each job classification. For policies starting on or after September 1, 2026, the Department of Insurance set an average advisory pure premium rate of $1.65 per $100 of payroll, and insurers remain free to file their own rates. On $500,000 of payroll, that average works out to 5,000 × $1.65, about $8,250 a year, before an insurer’s own rate and any experience modification. In one national insurer’s customer data, employers with three to five employees average $62 a month, while those with 10 or more average $160.
The premium goes up when more of your payroll sits in riskier classes such as roofing, framing, landscaping or warehouse work; construction and contracting average about $179 a month in that insurer’s data, against $34 for finance and accounting. Past injury claims raise your experience modification, and payroll placed in the wrong class or subcontractors without their own coverage add charges at the year-end audit. It goes down with a clean claims history, a written safety program and return-to-work plan, careful hiring, clerical and field payroll split into their correct class codes, and payroll estimates that match the year’s real numbers. List each role, its duties and expected payroll on the quote checklist, then send them over for a figure based on your own payroll. How to save on workers’ comp covers class codes, safety programs and return-to-work in more depth.
Planning for your first hire and every one after
Bringing on employees changes the insurance picture overnight. If anyone on your team works outside California, list each state, because workers’ comp follows the state where the work happens. Our new-business guide puts this decision alongside the lease and the first client job, so the first hire never catches you off guard.
Job duties shape the conversation more than titles do. A kitchen crew, a cleaning team and a landscaping crew each do different work, which is why the restaurant and landscaping guides describe roles in detail. Payroll estimates by type of work round out the picture and help the quote reflect your real team.
Job descriptions that match the work
Workers’ compensation pricing leans heavily on the type of work each employee does, so accurate job descriptions matter. An office manager who never leaves the desk is very different from a technician who climbs ladders or a driver who loads a truck. Write a sentence or two for each role describing the physical tasks, the tools used and where the work happens, rather than relying on a job title alone.
Describe mixed roles honestly. If an owner splits time between the office and the field, or a cashier also unloads deliveries, say so, and estimate how payroll divides between those duties. Part-time and seasonal staff belong on the list as well, with the months they usually work. An honest split keeps the estimate close to the real payroll and avoids surprises when the policy year closes.
When an employee gets hurt at work
Get the employee the care they need first, and within one working day of learning of the injury give them a DWC 1 claim form, as California law requires. Then write down what happened, where and when, who saw it and what the employee was doing at the moment of the injury. Photos of the area, the equipment involved and any spill or obstacle help everyone understand the event later, when memories have faded.
Contact us promptly and keep every record together: the incident notes, medical paperwork the employee shares with you and any messages about returning to work. A clear, early report makes the next steps easier for the employee and the business, and a short review of what caused the injury often points to a simple change on the floor. Our guide on what to do after a business insurance claim covers the reporting steps.
A few useful answers
Common questions
Is workers’ compensation the same as health insurance?
No. Workers’ compensation pays for medical care and lost wages from job injuries and illnesses only; it is not general health insurance for your staff.
Should I tell you when my team grows?
Yes. Payroll and job classifications help calculate workers’ compensation premiums, so new hires and changing duties are worth a quick update.
What information is needed for a quote?
Your payroll estimate for each role, what each employee does, where they work, your current policy and any past injury claims.
Does payroll affect the price?
Yes. California rates are set per $100 of payroll in each job class, so payroll is the base of the premium, and your claims record then moves it up or down through the experience modification.
How are business owners treated under workers' compensation?
Tell us whether owners or officers work in the business day to day and what they do, and we can discuss how they are handled on the policy.
What if an employee splits time between office and field work?
Describe both sets of duties and estimate how their time divides, so the classification reflects the actual work.