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California is the strictest state in the nation on this point: Labor Code §3700 requires every employer with even one employee to either carry a workers' compensation policy from an admitted insurer or obtain approval to self-insure. There is no small-employer exemption based on headcount, industry, or payroll size.

California workers' compensation is a no-fault, statutory exclusive-remedy system. The injured worker does not need to prove the employer was negligent, and in turn the worker generally cannot sue the employer in tort for a work injury. The trade-off is automatic, defined benefits regardless of who was at fault.

Part One — Workers' Compensation pays the statutory benefits required by the state's WC law and has no dollar limit because the obligation is whatever the statute requires. Part Two — Employers Liability protects the employer against employee-related lawsuits that fall outside the WC system, such as dual-capacity, consequential-bodily-injury, third-party-over, and loss-of-consortium suits.

Failure to carry workers' compensation in California is a misdemeanor. Under Labor Code §3722, the Director of Industrial Relations may issue a stop-order halting business operations until coverage is in place, plus assess civil penalties (commonly cited at $1,500 per employee under the stop-order, with additional minimums). The employer also remains directly liable for any work injury costs.

Part Two — Employers Liability is sold with three separate limits: bodily injury by accident (each accident), bodily injury by disease (policy aggregate), and bodily injury by disease (each employee). The California minimum customarily written is $1,000,000 for each of the three categories, often shown as 1M/1M/1M.

Temporary disability replaces a portion of lost wages while the worker recovers and cannot work. It is paid at two-thirds of the average weekly wage, subject to a statutory minimum and a maximum that is adjusted each year by the State Average Weekly Wage. TD is not a full wage replacement and it is not taxable.

Once the worker reaches maximal medical improvement, a physician assigns an impairment rating using the AMA Guides as adopted in California's Permanent Disability Rating Schedule. The rating, adjusted for age and occupation, produces a percentage that determines the number of weeks and the dollar value of permanent disability benefits.

Labor Code §5401 requires the employer to give the injured worker (or personally deliver/mail) the DWC-1 claim form within one working day after the employer learns of the injury. This short deadline is what triggers the formal claim process and the timeline for the insurer's investigation.

Labor Code §5402(b) creates a 90-day presumption: if the claim is not denied within 90 days after the claim form is filed with the employer, the injury is presumed compensable, and that presumption is rebuttable only by evidence that could not have been discovered with reasonable diligence within the 90 days. (Initial medical treatment up to $10,000 must also be authorized during the investigation.)

Labor Code §2775 codifies the ABC test from Dynamex / AB 5. To classify a worker as an independent contractor (and thereby avoid the WC obligation), the hiring business must prove ALL THREE prongs: (A) freedom from control and direction, (B) the work is outside the hirer's usual course of business, and (C) the worker is customarily engaged in an independently established trade or business of the same nature.

Labor Code §3351 (with §3352) lets corporate officers who own a sufficient share of the company — including a sole shareholder who is also an officer — sign a written waiver and exclude themselves from coverage. The exemption must be in writing and is filed with the insurer. Regular employees of that corporation still must be covered.

Labor Code §2750.5 creates a strong presumption that any worker performing services requiring a contractor's license without holding one is the EMPLOYEE of the hiring contractor — not an independent contractor. The general contractor's workers' compensation policy then has to respond, regardless of any side agreement that labeled the framer a 'sub.'

The X-Mod is calculated by the Workers' Compensation Insurance Rating Bureau (WCIRB) by comparing the employer's actual losses over a recent multi-year period to the average expected losses for businesses of the same class codes and payroll size. An X-Mod of 1.00 means average; below 1.00 lowers premium; above 1.00 raises premium.

Workers' compensation is the exclusive remedy against the EMPLOYER, not against unrelated third parties. Labor Code §3852 lets the WC insurer subrogate against the third party who caused the injury and recover what it paid in benefits, either by filing its own action, joining the employee's lawsuit, or asserting a lien on the employee's recovery.

The Uninsured Employers Benefits Trust Fund, administered by the Division of Workers' Compensation under Labor Code §3716, is a state safety net that pays workers' compensation benefits when an illegally uninsured employer cannot or will not pay. The UEBTF then pursues the uninsured employer to recover what it paid out.

Under Labor Code §4658.7, a worker with permanent partial disability whose employer cannot offer regular, modified, or alternative work within a set window receives a Supplemental Job Displacement Benefit voucher (currently up to $6,000) that can be used for tuition at California-approved schools, books, tools, certification fees, and other career-retraining costs.