Workers Compensation is a mandated employee benefit plan in all 50 states. Normally, it provides these benefits:

• 100% of job incurred medical expenses
• Loss of income, usually starting the 4th day and continuing until the employee can return to work. The weekly benefit varies from State to State, but we have seen it as high as $800 per week.
• Death Benefit for the survivors if the employee is killed or dies as a result of a job incurred event. This benefit is for the spouse and the children. In some states it exceeds $200,000.

Workers compensation applies to all employees of a firm, including active officers and partners.

 Some have been advised by their insurers and brokers that they can exclude the officers or partners from coverage. The Insurance Code makes it permissive. However, it is probably a bad idea for the following reasons:

• The Insurance Code (California) says it is permissive.
• The California Penal Code says all employees must be covered.
• The California Labor Code says all employees must be covered
• The California Administrative Code says all employees must be covered

The majority vote is with coverage.  Many years ago, the California Supreme Court weighed in on this subject.  The court pointed out that the officers do not have the right to exclude them selves because much of the benefits they give up are not theirs to give up.  This is a community property sate, so the spouse has a vested interest in the disability and death benefit. Thanks to Proposition 17, if there is no spouse or other beneficiaries to pay the death benefit to, it will be paid to the State Treasury.

Do you want your company liable for that $200,000 plus obligation?

And what if your corporation is made up of several officers who are not immediate family?  What do you think the surviving spouse will do when she is told there is no death benefit on the husband she just lost to an industrial accident?

Workers compensation is required, as we said. If you operate without it, the State can come into your business and close it down. It can also give you heavy fines for operating without it.

What is U S L & H?

Those initials stand for the United States Long Shoreman's and Harbor Workers Act which is mandated to apply to all dock workers, all workers working over navigable waters, and it even applies to firms that supply or manufacture marine products.

The benefits under USL&H are greater than those paid under State Workers Compensation policies. Benefits are mandated in Federal Legislation, and they tend to be much more generous than State benefits.

As a consequence, the rates you will pay for the workers affected by these exposures will be greater than you pay for regular workers compensation. This means the payroll record will have to keep these employees payrolls segrated from the other payroll for compliance with reporting issues.

My Employees are 1099 Independent Contractors

These are dangerous waters! When it comes to workers compensation, the only persons who are subject to 1099 rules are Licensed contractors who can give you a certificate of Workers Compensation.

If you can tell him what to do, what to work on, where to go to work, when to go to work--he is an employee under workers compensation rules.

Workers Compensation for Big Businesses

Just as one size does not fit all in jeans, workers compensation has niches that different companies focus on.

We have one company that we think very highly of that has sent us the following appetite list.

Core Busines

• Construction
• Maritime
• Manufacturing plants

What the Company Excells at:

• Insuring multi State accounts
• Providing State Benefits for each state
• Providing U S L & H and M E L benefits in the same policy as WC
• Providing superior claims service
• Providing superior safety engineering

Other Features

• Competitively priced
• Flexible Underwriting
• Guaranteed Cost Plans
• Deductible Plans
• Retrospective rating plans
• Collectively Bargained WC in California and various other states

If your company fits into this company's wish list, please contact

        Claude Stephenson

        CONTRACTORS & MANUFACTURERS

        INSURANCE SERVICES

        License 0c73809 

        Phone 818 407 3838

The company has a minimum premium of $75,000 for certain manufacturing risks, and its minimum is $100,000 for construction related risks.

WORKERS COMPENSATION FOR SMALL FIRMS

SMALL FIRMS have all the same concerns as the larger firms, except they may not have much buying power.  Many insurers have set their minimum premiums at levels that keep small firms from applying. However, we do have a good number of insurers that like the small firm business, and they do an outstanding  job so these firms can grow.

Watch this column.

We will continue to add bulletins to it as we receive them from the insurers, particularly bulletins that have a bearing on your profits.

Minimum premiums for small firms may start around $1,000 per year, or less. Since the coverage is payroll driven, your deposit will be based on the projected premium as a percentage of your payroll, or the minimum for the year, whichever is the greater. We have one company that has a $650 minimum as of this writing.

For full information, contact us at 818-407-3838.  We will be happy to provide you comparative quotations for your specialty.